Nationstar class action claims company denied loan modifications allowed during COVID

Nationstar loan class action lawsuit overview: 

• Who: James W. Groves and Judith Bartell-Groves filed a class action lawsuit against Nationstar Mortgage LLC d/ba/ RightPath Servicing. 
• Why: Groves and Bartell-Groves claim Nationstar unlawfully denied loan borrowers loss mitigation assistance during the COVID-19 pandemic. 
• Where: The class action lawsuit was filed in Ohio federal court. 

Nationstar wrongly denied Ohio loan borrowers’ loss mitigation assistance during the COVID-19 pandemic, a new class action lawsuit alleges. 

Plaintiffs James W. Groves and Judith Bartell-Groves claim Nationstar’s denial of eligibility for loss mitigation assistance “was improper as each such denial was based upon an eligibility requirement that does not exist.” 

Nationstar denied loan borrowers eligibility for loss mitigation assistance on the basis that the principal and interest (P&I) portion of their monthly mortgage would not decrease, according to the Nationstar class action. 

Groves and Bartell-Groves argue Nationstar’s “improper” denial of eligibility was based on “false pretenses” and constitutes “a failure to act in compliance with the regulations of the HUD Secretary and evidence a lack of reasonable skill, care and diligence.” 

Further Nationstar failed to act in good faith “and with fair dealing with respect to each of the loans,” the Nationstar class action alleges. 

Nationstar class action claims lender wrongly denied loss mitigation relief for loan borrowers

“Nationstar, in sending correspondence stating or otherwise communicating to Plaintiffs and each Class member that they were ineligible for a Recovery Modification based upon false pretenses, engaged in conduct constituting dishonest dealings and misrepresentations,” the Nationstar loan class action states. 

Groves and Bartell-Groves want to represent an Ohio class of loan borrowers who have mortgage loans secured by residential real property and insured by the Federal Housing Administration. 

They accuse Nationstar of violating the Fair Debt Collection Practices Act and the Ohio Residential Mortgage Licensing Act. 

Groves and Bartell-Groves demand a jury trial and request declaratory relief along with an award of actual, punitive and statutory damages for themselves and all class members. 

A consumer filed a separate class action lawsuit against Nationstar last November, arguing the company has a history of making unauthorized withdrawals from its customers’ bank accounts. 

Did Nationstar deny you loss mitigation assistance during COVID-19? Let us know in the comments! 

The plaintiffs are represented by Marc E. Dann, Daniel M. Solar, Brian D. Flick and Michael A. Smith Jr. of Dann Law.

The Nationstar loan class action lawsuit is Groves, et al. v. Nationstar Mortgage LLC, Case No. 1:22-cv-02072, in the U.S. District Court for the Northern District of Ohio.

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