Mortgage Payment Convenience Fees Lead to Selene Finance Lawsuit

The fees surrounding mortgage payments and other types of debt collection are regulated by the Fair Debt Collection Practices Act (FDCPA). Under the protection of this law, a debtor has filed a class-action suit against Selene Finance LP regarding their application of mortgage payment convenience fees.

The suit alleges that, despite knowing that these sorts of fees were “not expressly authorized by standard-form mortgages or permitted by law”, Selene charged mortgage holders mortgage payment convenience fees for payments made online or over the phone.

What Are Mortgage Payment Convenience Fees

According to Investopedia, debt collectors charge mortgage payment convenience fees when consumers make payments using non-standard methods. This means making payments using anything other than cash, check, or automated clearing house transfer. These fees may be set at a fixed amount or be calculated based on a percentage of the payment being made, usually between two and three percent.

These convenience fees are charged not just for mortgage payments, but also property tax payments, college tuition payments, and taxes. These fees are ostensibly charged to compensate the debt collector for the use of a payment processing company. These fees differ from the types of surcharges often associated with using a credit card, changes that are illegal in some states.

The Fair Debt Collection Practices Act Prohibitions

As stated above, the use of mortgage payment convenience fees is restricted by the FDCPA.

According to the Federal Trade Commission (FTC), this law is meant to make it “illegal for debt collectors to use abusive, unfair, or deceptive practices” to collect debts, including the improper application of fees. Most importantly, under this law, debt collectors must not collect interest, fees, or other charges in excess of what the debtor owes unless stated in the original contract agreed to by both parties.

This guideline is explained under the “Unfair Practices” provision of the FDCPA. This provision makes it illegal for your mortgage services to charge any fees not expressly laid out in your contract. It also makes it illegal for debt collectors to charge you for communication such as telephone calls.

Mortgage Payment Convenience Fees Lawsuit

Plaintiff Robin M. filed a class action suit against Selene Finance on May 5, 2020. Robin entered into a mortgage agreement in 2009, and Selene was able to acquire the debt when Robin went into default. At no time did any agreement entered into by the plaintiff include the application of mortgage payment convenience fees for payments made over the phone or online, according to Robin.

According to the suit, Selene is a debt servicer that specializes in “high-risk, high-interest residential loans”. Under most circumstances, mortgage holders are able to pay using an automatic withdrawal or check, but sometimes consumers need to make payments quickly to meet a deadline. In these cases, consumers may turn to online payments or phone payments to ensure they can make a payment quickly. In these instances, Selene charges mortgage payment convenience fees.

However, according to the suit, these fees are not included in the mortgage agreements signed by debt holders. They also allegedly far exceed the actual cost incurred by Selene for processing these payments. According to the suit, Selene has made millions of dollars in mortgage payment convenience fees.

The suit cites the FDCPA as justification for legal action. It seeks to create a class of plaintiffs who each were charged these fees despite the specifics of their mortgage agreement.

The Mortgage Payment Class Action Lawsuit is McNeil, et al. v. Selene Finance LP, case number 1:20-cv-21955-XXXX, filed in the United States District Court of the Southern District of Florida.

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.

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