By Jennifer L. Henn  |  December 22, 2020

Category: Legal News

Home mortgage notices must conform to consumer protection regulations.

Dozens of homeowners have reached a proposed $7 million settlement with Seterus Inc. in a class action lawsuit about threatening notices the company sent out regarding their home mortgage.

Lawyers for the 29 lead plaintiffs submitted the deal to the U.S. District Court for the Middle District of North Carolina on Dec. 17. If approved, it would cover an excess of 46,500 Class Members in 12 states who got the home mortgage notices when their loan payments fell more than 45 days behind.

The letters, sent between 2012 and 2019, said the company would accelerate the mortgages – making the entire outstanding balance due immediately – or foreclose on the property if the debt wasn’t satisfied immediately.

According to the homeowners’ class action lawsuit, the threats “violated Seterus’ actual policy to never accelerate a loan so long as any payment sufficient to bring the loan less than 45 days delinquent is made prior to the expiration date set forth in its Final Letter.”

They also violated the federal Fair Debt Collection Practices Act, according to the plaintiffs.

Under the terms of the proposed settlement, Class Members in North Carolina will likely net the largest amount from the deal, approximately $182 each. Those in Michigan, the state with the highest number of anticipate Class Members, are expected to net about $95. Class Members in Alabama, Florida, Georgia, Kansas, Minnesota, Missouri, New Jersey, New York and Pennsylvania will get roughly $63 each and those in California will get nearly $53.50 each.

The plaintiffs’ lawyers are slated to receive $2.3 million, representing one-third the overall payout, in compensation and another $66,271 in litigation costs. The settlement administrators who will handle distributing the payments to the Class Members will get $110,000 to do the job.

Home mortgage notices must conform to consumer protection regulations.Another $55,000 of the proposed Seterus payout will go to the home mortgage owners who filed the case. It will be awarded at a rate of $3,500 for each set of named plaintiffs who provided discovery and were deposed, $2,500 for each set of who provided discovery only, and $1,000 for each “who were prepared to provide discovery yet never had to do so.”

“Given the litigation risks, the complexity of underlying issues, the skill of defense counsel, and the amount of money recovered for Settlement Class Members, the proposed settlement ensures a meaningful recovery,” the plaintiffs’ lawyers wrote in the request for the court’s approval.

The case began in 2017 and settlement conferences were held in February and June. The two sides reached an agreement in principle in November, according to the settlement proposal.

Have you received threatening notices from your mortgage lender? Tell us about it in the comment section below.

The lead plaintiff and Class Members are represented by Scott C. Harris and Patrick M. Wallace of Whitfield Bryson LLP and Edward H. Maginnis, Karl S. Gwaltney and Asa C. Edwards of Maginnis Law PLLC.

The Home Mortgage Class Action Lawsuit is Tracy Adams, et al. v. Seterus Inc., et al., Case No. 1:17-cv-995, in the U.S. District Court for the Middle District of North Carolina.

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33 thoughts on$7M Seterus Home Mortgage Class Action Settlement Proposed

  1. Sandra Estrada says:

    Please add me to this lawsuit

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