Bogus Fee Complaints Continue Rolling In Against Loan Servicer Despite Settlement In Class Action Lawsuit

ConsumerAffairs.com reports:

• Four months after [Goldman Sachs-owned] Litton Loan Services settled a class action accusing the company of imposing bogus late fees,(1) complaints about Litton continue to roll into ConsumerAffairs.com. Some consumers allege that Litton failed to timely post payments to their accounts, the main issue in the class action. Still others get the run-around from the mortgage servicing company on the possibility of receiving a loan adjustment, leading to confusion and, in many cases, the threat of foreclosure.

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• In April, Litton settled a class-action lawsuit alleging that the company failed to credit borrowers' mortgage payments in a timely fashion, then turned around and charged late fees for the purportedly tardy payments. In some cases, consumers' accounts were put into default. The suit covered all homeowners whose mortgage transaction was transferred or sold to Litton between October 2002 and February 2009, and who were charged erroneous late fees within 60 days of the transfer.(2)

For more, see Litton Loan Complaints Continue Following Settlement (Distressed homeowners target Goldman Sachs subsidiary).

(1) According to the story, in July 2007, a federal judge in California certified a class of plaintiffs alleging claims under the Real Estate Settlement Procedures Act, or RESPA. The case was settled in April; as part of the agreement, Litton agreed to create a settlement fund containing $537,500, from which plaintiffs can draw up to $60 each. The narrow definition of the class and relatively small settlement amount likely left some consumers disappointed, but it at least signaled that Litton was willing to put the issue to rest.

(2) Litton Loan Servicing has recently been targeted by ACORN's "Home Wreckers" campaign targeting mortgage lenders that aren't adjusting loans under the Obama administration's $75-billion Making Home Affordable program and other home-saving efforts from the federal government. See Los Angeles Times: ACORN protests Litton Loan Servicing outside foreclosed home in L.A.