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Homeowners who filed a class action lawsuit against a Florida mortgage service provider over pay-to-pay fees have agreed to settle the case for $12.6 million.
The plaintiffs suing PHH Mortgage Corp., and its parent company Ocwen Loan Servicing, submitted a request for preliminary approval of a proposed settlement agreement in U.S. District Court in Florida on August 25. They are asking the judge overseeing their case to endorse the deal hammered out earlier this year. The agreement includes financial compensation and changes to the way the company deals with alternative payment methods.
Central to the case was PHH Mortgage’s practice of charging what it referred to as “processing fees” when customers made their home loan payments online or over the telephone – fees ranging from $17.50 to $7.50 – the plaintiffs said. Those charges violated the Federal Fair Debt Collection Practices Act and were in breach of their mortgage contracts, according to the class action lawsuit.
Details of the Pay-to-Pay Fees Settlement
The proposed settlement sets up eligible Class Members to get refunds of 18% to 28% of the pay-to-pay fees they paid PHH Mortgage Corp. between March 25, 2016 and Aug. 21, 2020, according to the request for approval.
About 80% of the Class Members still have mortgages that are being serviced by PHH and they will have their applied directly to their accounts, according to the settlement proposal. The remaining plaintiffs will receive direct payments after filing claims for their refunds.
Along with the financial portion of the settlement, PHH Mortgage Corp. has agreed to reduce its online payment fees by 13% and to freeze that amount for three years. Similarly, the company said it would freeze the amount it charges in pay-to-paw fees for telephone transactions.
PHH Mortgage also agreed to improve the way it discloses the fees to customers so there can be no mistaking when and what its borrowers will be charged.
Pay-to-Pay Fees Increasingly Common, Sometimes Hidden
Pay-to-pay fees – sometimes referred to as processing or convenience fees – are charged when customers use alternative methods to pay their bills.
Businesses say the fees help offset the costs associated with processing payments electronically.
Convenience fees are typically a set dollar amount assigned to the specific type of payment, Investopedia says. The amounts vary by company, and sometimes transaction. It might cost $5 to make an online payment, $7 to make a payment over the telephone, and $10 to make a payment by telephone with a live customer service representative, for example.
In theory, pay-to-pay fees are legal if they are disclosed in advance and allowed for in the terms of the customer’s contract or service agreement.
Many consumers are caught unaware by the charges, so much so that the federal Consumer Financial Protection Bureau issued a warning in 2017 about companies “tricking” customers into expensive pay-by-phone fees by misleading them or “keeping them in the dark about much cheaper or no-cost payment options.
Similar Class Action Lawsuits
The PHH Mortgage pay-to-pay case is just the latest in a string of class action lawsuits filed by consumers who are contesting the convenience charges.
A Florida woman brought a similar class action lawsuit against AmeriHome Mortgage Company at around the same time the PHH Mortgage case was filed. In that matter, homeowner Sandra E. Lish says AmeriHome violated state laws and breached their contract when it charged her to $2 each time she paid her home loan over the telephone.
In Texas earlier this year, a homeowner filed a lawsuit against Lakeview Loan Servicing and its sub servicer Loancare, which took over the administration of her Federal Housing Authority mortgage and began charging her pay-to-pay fees. Before she filed suit, the companies had charged her $444 for making mortgage payments over the phone and online.
The PHH Mortgage Pay-to-Pay Fees Class Action Lawsuit is Vincent J. Morris, et al. v. PHH Mortgage Corp., Case No. 0:20-cv-60633 in the U.S. District Court for the Southern District of Florida, Fort Lauderdale Division.
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.
This article is not legal advice. It is presented
for informational purposes only.
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26 thoughts onPHH Mortgage Corp. Agrees to Settle Pay-to-Pay Class Action for $12.6M
My father’s home was stolen from PHH Reverse mortgage back 20011 they have illegally forclosed on our family home because they had wrong info on his account wrong address wrong phone numbers I feel this was done intentionally so his house would be foreclosed he’s a veteran 23 yrs AirForce .
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Phh has charged me 15 dollers everytime I make my mortgage payment them they say it’s late and charge me a no there 35 dollers for late fee and then the they chargede 1345 saying I asked for a pay off quote and a no there 1150 for prossessing fees on when I had to stop the foreclosure on my home
Wanted to know if they settled or not? If it’s an on going lawsuit?
I have been in forbearance 18 months due to COVID-19 long haulers and a cancerous brain tumor that left me disabled with a bunch of extra medical bills. I had not missed any payments before I had to go into forbearance. Filed for hardship and sent proof of reduced income and a hardship letter and my payment actually went up. I didn’t sign the agreement but instead called to let them know that I couldn’t make the payment and was told that I didn’t have to sign the modification form in order for them to apply it to my loan. When it clearly gave me the option to accept, not accept or do a short sale. I initially had an FHA loan that just so happened to “mysteriously” turn into a conventional loan. I never signed or refinanced to a conventional loan. They also have sent an inspector to look at my property. Then the representatives each tell you different things so you don’t know who to believe. No consistency with this company. I hate this company. They don’t allow you to ask questions and try to rush you off the phone when you catch them up in lies. Representative claimed she couldn’t get a supervisor on the phone because there was not one available. Then they wrote me letters saying that they weren’t able to contact me even though I answer every call from them. They told me I didn’t qualify for a forbearance extension but gave it to me anyway without my knowledge and now since my mortgage mysteriously went from an FHA mortgage to a conventional I have to pay the amount of the extension all in one lump sum. Frustrated to the max on top of dealing with health issues.
Not to mention that I have answered their calls and no one says anything and just hangs up!! This company sucks. They act like they care about what you are going through but in reality I don’t believe they do but just want money.
My loan was transferred to PHH in June while on forbearance. Been trying to end the forbearance since July 1st. I have been lied to, given disinformation for months, never able to speak to a “Relationship Manager” they assign to you because she doesn’t make any of the scheduled appointments and always get a random person call instead that will only give first name. Can’t even make a payment online because I am blocked due to being delinquent even though it’s forbearance. One person put in the wrong loan forgiveness application which I was denied. Then just had someone else put in for the correct loan modification application. Waited weeks to get some forms they needed signed and notarized and now they tell me that I can’t get the loan modification approved because of a line due to a debt from 2016 from capital one that I don’t even have debt with. I purchased my home right before lock down in 2020. Iam freaking furious over this place. They are not a mortgage company they are a debt collector because that’s all they ever identify with. I requested a manager contract my multiple times. All I wanted was to start paying my mortgage payments again since July. I’ve documented every phone call, each person’s first name and ID number, date, time and our full conversations since day one.
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Never paid by phone or online. Always paid by money order. We had OCWEN as a mortgage company and then PHH took over. Sent payments on our home of 20 years. Said they didn’t received it. Quickly foreclosed and harassed us out of the house. Never MISSED or was LATE on a payment. My dad died 2 days before we were homeless. During a pandemic its been 10 months and we are still living in a car. No one will rent to us or help us. My mom has had the same job for 30 years!!!!! My daughter has been taken away because we have no home. PHH are crooked, lying thieves!!! No one will rent to someone with a foreclosure and they made my mom think they would have her arrested if she stayed in the house. These people are sick!!! No one gives two shakes about us losing our home when we never missed or were late on a payment!!! It was $687 a month!! We now are having to pay for the new washer and dryer we have lease to own in storage and can not use! My dads ashes are in a trunk and we have used up what we had for deposit,rent etc because no one will rent to us. My mom is 72 years old and worked her entire life to have some lazy, lying, thieving crooks steal everything from us for no reason. Nothing.
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Someone please contact me.
Please add me. I have tried to deal with them for years and paid a monthly fee for my payment for 17 years and they changed my interest rate. I changed lenders because of what they did to our family
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All issues email ladybrownjustice@gmail.com. Something has to be done.