Select Portfolio Servicing, Inc. (SPS) and U.S. Bank, N.A. are staring down a proposed class action that alleges the companies engaged in abusive collection activities concerning a New York consumer’s mortgage loan.
According to the lawsuit, the plaintiff’s U.S. Bank mortgage debt was accelerated in 2009 and began being serviced by SPS in 2013. The case alleges that in April 2018, SPS sent a letter to the plaintiff that stated the balance would increase if payment was not received by the following month and further indicated outstanding balances labeled as “unpaid late charges” and “other charges and fees.” The suit says that since the debt was accelerated, applying late fees to the account breached the plaintiff’s mortgage agreement and violated state law. The case argues the defendants knew or should have known that they were not, in fact, permitted to charge late fees, but continued to apply monthly charges in an attempt to collect more than they were entitled to.
In July 2018, the case continues, the plaintiff sent SPS a qualified written request stating that he believed the late fees to be improper. The defendant allegedly replied the following August saying it was “in the process of completing [its] research of the issue(s),” but failed to provide any further response or take corrective action.
Adding to the suit’s breach of contract claims, the plaintiff alleges the defendants charged him “excessive and unreasonable inspection fees.” Pursuant to the man’s mortgage agreement, an inspection fee could only be charged if the defendants could not get in touch with the plaintiff to determine the condition of the property, the complaint says. The plaintiff claims, however, that the defendants knew the property was occupied and were “in regular contact” with him and his legal counsel since the foreclosure action in 2009. According to the case, the defendants nevertheless charged over $1,200 in improper inspection fees, including 29 separate fees on a single day in June 2013.