Sage Datko  |  May 31, 2020

Category: Fees

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Have you been charged fees when making your mortgage payment by phone?

According to consumer complaints, some mortgage lenders may be charging prohibited fees for people who make their mortgage payment by phone or online.

Is it Legal to Charge Fees for Making a Mortgage Payment by Phone?

In a recent class action lawsuit against PennyMac Loan Services, plaintiffs Kendra T. and Andrew B.  claim that the residential mortgage servicer may be illegally profiting by charging mortgage borrowers fees for making a mortgage payment by phone, online, or with a debit card. They claim that they have been charged fees for paying their mortgage over the phone in November 2019, December 2019, and February 2020, and that these fees are not allowed under their mortgage agreement.

In some cases, mortgage servicers disguise these fees as “processing fees.” However, this indicates that the fees are necessary in order for mortgage holders to have their payments processed. Some consumers have reported their mortgage servicer misrepresenting these fees as being unavoidable, when they were actually fees for optional services. In many cases, consumers have reported being charged a processing fee for a service they didn’t actually need, such as expedited posting of their payment.

Additionally, most mortgages include clauses prohibiting these fees. Lenders and servicers who charge these fees may be violating their own agreements, in addition to financial laws. If you have been charged pay-by-phone fees for making a mortgage payment online or over the phone and these fees are not detailed in your mortgage agreement, you may be eligible to speak with an attorney about your legal options.

PennyMac Mortgage Lawsuit

When making a mortgage payment by phone, is it legal to charge fees?PennyMac is a mortgage servicer that services approximately $368 billion in mortgage loans for almost 2 million homeowners. According to plaintiffs Kendra and Andrew, the servicer may be violating the Rosenthal Fair Debt Collection Practices Act, as well as the Unfair Competition Law, in addition to the terms of their mortgage agreements by charging mortgage holders fees to pay their mortgage.

While PennyMac and other mortgage lenders are generally compensated through the interest that mortgage holders pay on top of their principal loan amount, some of these lenders may also be turning a profit off of deceptive mortgage payment fees.

According to them, PennyMac charges a fee of up to $15 for each payment made over the phone through a customer service representative. Additionally, Kendra and Andrew claim that the lender charges up to $5 for each payment made online, and up to $6.75 for each payment made using a debit card.

Although PennyMac’s mortgage agreements allow the servicer to charge borrowers for the actual costs of processing these payments, financial regulations prohibit the lender from inflating these fees. However, Kendra and Andrew claim that is exactly what PennyMac is doing, as the actual cost of processing payments made over the phone or online is much lower. They claim that this actual cost may be around $0.50 per transaction.

However, if PennyMac charges mortgage owners $15 per month for each transaction made over the phone, the servicer may be collecting almost $200 each year in mortgage payment fees on a single loan.

If you have been charged prohibited mortgage payment fees by your mortgage servicer when paying your mortgage over the phone or online, you may be eligible to speak to an experienced attorney about your legal options. Victims of improper mortgage payment fees who pursue litigation may be able to recover reimbursement for these fees in addition to further compensation.

Kendra and Andrew’s Mortgage Payment by Phone Lawsuit is Case 5:20-cv-01052, filed in the U.S. District Court for the Central District of California.

Join a Free Mortgage Payment Fee Class Action Lawsuit Investigation

If you were charged a convenience fee for paying your mortgage online or over the phone, you may qualify to join this mortgage payment fee class action lawsuit investigation.

Get a Free Case Evaluation

This article is not legal advice. It is presented
for informational purposes only.

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16 thoughts onLawsuit Claims PennyMac Charges Illegal Mortgage Payment by Phone Fees

  1. Nicole says:

    I was done wrong also. My rent went up a whole 400. My first payment was sold to Penny Mac never knew about them until my first payment. They got property taxes mixed up and never notified me. They make it where it’s not affordable and you can’t feel comfortable in your own home.

    1. Clark Davis says:

      It hurts me to say they “PennyMac” crooks first don’t know how I became their customer then my payments started changing…..when they discovered I was a Disabled Veteran with a 100% rating and they changed my payment again then in which I join the homestead program once again payment went up instead of down then I applied for a forebarence which change to IRRL which was great if you think 100.00 reduction 1732 ——1868 a month only thing is is the rate 2.75% which no one can touch as a refinancing a VA loan ….!!!!!

  2. Dale Lindle says:

    I was so fed up with Pennymac over these same issues, and others. I demanded they remove the escrow from my payment. I had my loan for 2 years and both years they did not pay my homeowners insurance on time. Resulting in my home insurance getting cancelled. I had to pay out of pocket then be reimbursed out of my own escrow account. This clown show called Pennymac are nothing more than idiots stealing our money. DONT let them get away with this. Call everyone you can.

  3. Nancie Brown says:

    Since 2019 Pennymac escrow servicing has claimed a shortage and has collected extra payments for years. This year, taxes and insurance are about the same but once again escrow is short. Only thing the shortage this year is a $1700 year increase with taxes and insurance remaining close to the same as last year. Something unethical is going on. People need to rally together and as a group and hire a group lawyer to investigate their shady escrow practices. Anyone know how that can be done? They seem to be stealing people’s money and they need to be heald accountable. Group action or class action needs to be taken. How does one get it started?

    1. SG says:

      Penny Mac has done the same to me over the last two years. Sold me a refi for a lower payment but yearly “escrow shortages” have now increased my payment to a higher amount than the original. And I just found out that it will most likely happen again in November of this year. Shady practices!

  4. yolaidi cutino says:

    Im having the same situation with the escrow and they told as that the taxes went up but is not true and this is been going on since 2019 the landing mortgage are frund and they only here too take money from people.

  5. Coco Renee says:

    Reading all these comments definitely got me on the edge! I’m a fist time homeowner and right before the first payment is due, my mortgage lender sold out to Penny Mac. The name alone to me sounded sketchy! I was forced to put over 22k on my closing cost, majority of it went to escrow, and I’m just afraid, this company is going to play over me, being that I’m a single mother, and this is new to me.

  6. Donna Gries says:

    Why is it every year I go through this that my escrow is short. My insurance and taxes are paid from my escrow and in the last two years my loan payment has increased over $600.00. I can’t afford this. What do I do? They claim I haven’t paid insurance and I send my receipts from flood insurance and they claim they haven’t received anything. HELP!! I am 75 years old and in desperate need of help. TIA

  7. Dianne A. says:

    Will I just got a letter that I owe $346.00 and if not paid my home will be put into foreclosure…I honestly, don’t even know what the $346.00 is for because it didn’t specify but I will pay and start working on getting away from PENNYMAC the debt collection agency ??.

  8. David cook says:

    Yes Veterans United and Pennymac are good buddies thieves United living off escrows and insurance frauds. I sold the house realizing they were crooks.

  9. Kathy Abrams says:

    My escrow accouny is a mess! Numerous calls never returned. Had money paid for taxes and insurance taken out at closing time but taxes weren’t paid. They do not respond to requests to show where money went!

  10. Sandra Eldeeb says:

    Has anyone had problems with saying your escrow account was short no matter what you pay in it? And then demand the money on one lump sum or make your payment go up over 12 months?My house payment has went up every year for 6 years.

    1. Timothy Mullin says:

      Interesting…. there famous line is a late fee as my bank kicks out the payment but takes a week for there’s to process… money is always gone from my account instantly

    2. Vince says:

      Yes Sandra, PennyMac are thieves. It is Countrywide Loans, with a changed name: “Re-branded”. The only way out? Refinance. Our mortgage was sold to them by similar garbage people at Veterans United. We have refinanced our VA loan with USAA. PennyMac played HORRIBLE games with our escrow for years. They are truly disgusting and shameful individuals clocking in and out under a garbage brand.

    3. Dennis Morris says:

      YOU ARE APSALUTLY RIGHT, THY ARE PLAYING THE SAME GAME WITH MY ESCROW ACCOUNT. I KNOW FROM THE START , WHEN I TRYED TO WALK AWAY A 300. DOLLAR BRIB TO STAY, NEVER MADE GOOD ON IT?? THANK YOU WILLIAM HUMPHRIES. (TEAM LEADER ) MYMAC TEAM. TOTAL LIERS TOP TO BOTTOM……..

    4. Keira says:

      Yes! This is happening to me now and I’m not sure what to do.

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