A federal judge has given preliminary approval to a $3.6 million settlement in a class-action lawsuit against Mr. Cooper for allegedly charging defendants “excessive fees.”
The lawsuit, filed in the U.S. District Court for the District of Columbia, alleges that Mr. Cooper imposed illegal service fees when customers made monthly mortgage payments over the phone or online. Bank of America and PHH Mortgageaccused of similar conduct.
The lawsuit alleges that this practice violates multiple state consumer protection laws, including the federal Fair Debt Collection Practices Act (“FDCPA”). Law360 first reported the preliminary decision.
The lender declined to comment on the preliminary settlement, noting that it does not comment on pending litigation. Mr. Cooper allegedly stopped the practice in May 2018, the lawsuit states.
Jackley McFadden, Selinda Lake, Mary Montgomery and Lillian Nelson represent the class of borrowers harmed by Mr. Cooper’s charging practices.
In the lawsuit, defendant McFadden claims she paid her mortgage over the phone for $19 each.
“Mr. Cooper’s conduct was deceptive and he charged Ms. McFadden higher fees than were actually spent to process the paid transactions,” the lawsuit states.
If approved, the $3.6 million payment would be distributed among three groups: $1.4 million would be allocated to DC members of the class, $2 million would be allocated to the national class, and $179,291 would be used to cover administrative costs and other court expenses Expenses – Approve regrettable expenses.
The second part of the settlement included non-monetary injunctive relief, whereby Mr. Cooper “agreed not to charge or collect facilitation fees from the borrower for at least six months after the issuance of the final approval order, which constitutes a total injunction of approximately two years,” according to court documents. Relief.”
The final approval hearing will be held on March 8, 2024.
The initial approval comes amid growing public discussion Regulation of garbage chargesThe Biden administration, the Consumer Financial Protection Bureau and several state governments have been involved over the past year. The financial services industry has been the target of criticism Accused by the CFPB of relying on trash fees as a source of revenue. last year, Some state regulators have also called for an end to pay-to-play payments In mortgage and other loan servicing, CFPB says the practice falls within the definition of a garbage fee.