Mortgage Loan Servicer Faces Class Action; Accused Of Clipping Homeowners With Dubious Fees

In Minneapolis, Minnesota, the Pioneer Press reports:

• A group of homeowners is suing Homecomings Financial, a Bloomington-based loan servicer handling nearly 800,000 mortgages, accusing it of charging dubious fees as it processes homeowners' monthly payments. The lawsuit, filed Thursday in U.S. District Court in Minneapolis, is the latest in a slew of legal actions around the country against mortgage lenders and the servicers who process payments for them since the crash of the subprime mortgage industry. Attorneys are seeking national class status. The plaintiffs are five homeowners in Michigan, Illinois, California, Kentucky and Florida. They allege that Homecomings uses deceptive fees to deliberately put borrowers into default in order to maximize profits. The charges violate state and federal laws, they charge, including the Fair Debt Collection Practices Act and the Truth in Lending Act. [...] Their attorney, Doug Micko at Sprenger & Lange in Minneapolis, said he doesn't yet know how large the class might be or how many borrowers might be in Minnesota.

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• The company last month lost a somewhat similar lawsuit in Missouri over fees. A jury awarded homeowners $99 million in punitive damages - $92 million from Homecomings. The company said it planned to appeal. Homecomings is part of Residential Capital Corp., also in Bloomington and the mortgage arm of GMAC Financial Services in Detroit.

For more, see Loan servicer Homecomings sued over fees (Firm services 800K mortgages).

See also, Class Action Lawsuit Filed Against Homecomings.

To view lawsuit, see Motley, et al v. Homecomings Financial, LLC.

Co-counsel for plaintiffs in this lawsuit is Mehri & Skalet, PLLC, in Washington, D.C.

For more information on this class action, see the Homecomings Financial Class Action website.

For the attorneys' press release about this case, see Homeowners Allege Illegal Business Practices in Servicing Home-Secured Loans.

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