A group of banks, law firms, and loan servicers are facing a proposed class action that was removed to California federal court this January and accuses the parties of wrongfully collecting on defaulted mortgage loans.
A group of banks, law firms, and loan servicers are facing a proposed class action that was removed to California federal court this January and accuses the parties of wrongfully collecting on defaulted mortgage loans. The complaint summarizes the plaintiff’s allegations in the following statements:
“Defendants enacted a scheme to increase their profits by assessing to [the plaintiff] and similarly situated individuals unearned fees, new debts, and impermissible kickbacks while collecting delinquent debts owed others and enforcing security interests in real property. Defendants either provided no services, or provided duplicative, unnecessary, or illusory services, in exchange for adding the unearned or grossly inflated fees to the accounts of [the plaintiff] and other similarly situated individuals.”
The plaintiff says he fell behind on two mortgage loans, in part because the defendants charged him excessive fees for servicing the loans. He argues that they initiated foreclosure against him without proper authority and collected proceeds from the foreclosure sale that should have been paid to the original creditors. On top of that, the defendants allegedly continued demanding the remaining portion of the debt and reporting it to credit bureaus even after the property was foreclosed, in violation of California state law.
The suit claims the defendants “received and retained at least $1,345,000.00 to which they were never entitled” as purported compensation “for services [they] never performed and expenses [they] never actually incurred.”
The complaint names the following entities as defendants: