Nationstar Charged Florida Mortgage Borrowers Unlawful Fees in Payoff Statements, Lawsuit Alleges

New to ClassAction.org? Read our Newswire Disclaimer

A proposed class action alleges Nationstar Mortgage, LLC, which does business as Mr. Cooper, has included unlawful and unauthorized fees in payoff statements sent to mortgage loan borrowers.

The 18-page case claims the mortgage servicer has violated federal and state debt collection laws by charging fees not authorized by borrowers’ mortgage loans or for services Nationstar has not actually performed. Per the suit, these fees include “[w]interization” fees for Florida residents, property preservation and hazard inspection fees for homeowners who are still living at the property, and payoff quote fees and documentary stamp taxes that “were not properly due” under borrowers’ mortgages.

Want to stay in the loop on class actions that matter to you? Sign up for ClassAction.org’s free weekly newsletter here.

The lawsuit explains that the mortgage loans at issue, the standardized Fannie Mae/Freddie Mac Uniform Instrument for a single-family home, only authorize mortgage servicers such as Nationstar to charge fees incurred for services actually performed or “otherwise contemplated by the loan documents.” Charges such as “[w]interization” fees for properties located in Florida and property preservation or hazard inspection fees for properties in which the homeowner still resides are “illusory in nature” and not incurred for any services actually performed by Nationstar, the case argues. The other fees at issue are not set or sanctioned by borrowers’ loan documents, according to the complaint.

The plaintiffs in the case are four Florida residents who requested a payoff statement from Nationstar for their Miami property. Per the suit, Nationstar provided the statement on December 7, 2022 and included fees for “Winterization,” “Property Preservation,” “Third Party Reconveyance Preparation Fee,” “Payoff Quote Fee,” “Documentary Tax Stamps” and “Hazard Inspection.”

The lawsuit alleges that these fees bear “no rational relationship” to actual fees incurred by Nationstar in servicing the plaintiffs’ mortgage loan or were otherwise not authorized by their loan document.

According to the case, it is Nationstar’s practice to “routinely and systematically” charge mortgage loan borrowers these fees as part of standardized payoff statements mailed to them when their loans are in default.

“NATIONSTAR has systematically made the demands for the illusory and junk fees, when it knew these were not legitimate debts and fees and that it had no lawful right to collect from the borrowers,” the complaint charges.

The lawsuit looks to represent anyone whose Florida residence was mortgaged under the standardized Fannie Mae/Freddie Mac Uniform Instrument (Form 3010) or a “substantially similar” instrument, for whose mortgage loan Nationstar acquired servicing rights after the loan was in default, and to whom Nationstar mailed a payoff statement that included a “[w]interization” fee.

The case also looks to represent anyone whose Florida residence was mortgaged under the standardized Fannie Mae/Freddie Mac Uniform Instrument (Form 3010) or a “substantially similar” instrument whose mortgage payments were collected by Nationstar and to whom Nationstar mailed a payoff statement that included a “Property Preservation Fee” or “Third Party Reconveyance Preparation Fee” and “Hazard Inspection” fee when these fees could not be accrued due to the homeowner still living at the property, or a “Payoff Quote Fee” and “Documentary Tax Stamp” fee when these fees were not permissible under the loan documents.

Get class action lawsuit news sent to your inbox – sign up for ClassAction.org’s free weekly newsletter here.