Lawsuit Investigation into Notice of Default Letters
Last Updated on July 2, 2025
Investigation Complete
Attorneys working with ClassAction.org have finished their investigation into this matter. Check back for any potential updates. You can also sign up for our free newsletter for the latest in class action news and settlements.
If you still have questions about your rights, contact an attorney in your area as there is a time limit for filing all lawsuits. The information on this page was posted when the investigation began and is now for reference only.
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At A Glance
- This Alert Affects:
- Anyone who fell behind on mortgage payments and received a notice of default letter from Selene Finance, PHH Mortgage, Wells Fargo, Flagstar Bank, CrossCountry Mortgage or PennyMac Loan Services.
- What’s Going On?
- Attorneys working with ClassAction.org believe these mortgage servicers sent out notice of default letters that may have falsely stated that borrowers’ loans would be accelerated or foreclosed on if they failed to pay the overdue balance by a certain deadline. It’s possible that class action lawsuits could be filed over potential violations of a federal debt collection law.
- How Could a Lawsuit Help?
- Class action lawsuits against these mortgage servicers could help consumers recover money and potentially force the companies to ensure that their communications with borrowers are not misleading.
Attorneys working with ClassAction.org want to hear from mortgage borrowers who received a notice of default letter from one of the following loan servicers after falling behind on payments:
- Selene Finance
- PHH Mortgage
- Wells Fargo
- Flagstar Bank
- CrossCountry Mortgage
- PennyMac Loan Services
They are investigating whether these companies sent letters containing potentially false and misleading statements intended to intimidate borrowers into making immediate payments—including by threatening loan acceleration and foreclosure. The attorneys are now looking into whether class action lawsuits can be filed over possible violations of federal debt collection law.
What Did These Notice of Default Letters Look Like?
The notice of default letters at issue, which may have also stated “intent to accelerate,” “notice of breach,” or “right to cure default” at the top, typically included a demand for payment by a specific deadline and mentioned the possibility of loan acceleration or foreclosure.
A sample of each of the letters can be seen below.
Are Threats of Mortgage Acceleration and Foreclosure Illegal?
The attorneys working with ClassAction.org suspect that some notice of default letters may violate the Fair Debt Collection Practices Act (FDCPA), a federal law specifying that debt collectors are not permitted to use false, deceptive or misleading representations in attempting to collect a debt. Specifically, the law prohibits debt collectors, including lenders and creditors, from threatening to take an action they cannot legally take or do not intend to take.
In the letters at issue, the loan servicer may state that if the borrower fails to fully cure the default by a particular deadline, their mortgage will be accelerated—meaning the entire amount of the loan, plus certain expenses incurred by the servicer, will immediately become due. The letters may also warn that the servicer may initiate foreclosure proceedings, a process by which the real estate securing the mortgage note is sold at auction to pay off the loan.
However, attorneys believe these loan servicers may have no intention of taking the measures represented in their notice of default letters or may not be legally permitted to take such measures during the stated timeframes. Rather, it’s possible that they may have made false and misleading threats to intimidate borrowers into paying their overdue balances, even if such payments are beyond what’s necessary to avoid acceleration or foreclosure.
How Could a Class Action Lawsuit Help?
Class action lawsuits, if filed and successful, could help compensate borrowers who received misleading notice of default letters. Successful lawsuits could also force the loan servicers to change how they communicate with borrowers and ensure that their letters comply with federal debt collection law.
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