Morrisey joins bipartisan effort to protect homeowners
CHARLESTON — West Virginia Attorney General Patrick Morrisey recently joined a coalition of 33 attorneys general in taking a stand to protect homeowners from unlawful fees.
The bipartisan coalition opposes a proposed class action settlement that would permit a mortgage servicer to profit from illegal payment processing fees charged to homeowners who pay their mortgage online or by phone.
“Our office remains vigilant in protecting consumers,” Morrisey said. “Companies that pad their bottom line with unlawful processing fees cannot be allowed to continue such conduct in West Virginia or in any state.”
The coalition’s brief opposes the proposed settlement in Morris, et al. v. PHH Mortgage Corporation, et al., a case in which mortgage servicer PHH Mortgage Corporation would be able to continue to profit from unlawful processing fees the company has been charging to nearly one million homeowners nationwide, including more than 1,000 homeowners residing in West Virginia.
For years, the coalition argues, PHH charged nearly one million homeowners an illegal fee — ranging from $7.50 to $17.50 — each time a homeowner made a monthly mortgage payment online or by phone, despite many Americans paying their mortgages one of these two ways.
Nowhere in these homeowners’ mortgage contracts is there authorization for such fees and PHH does not charge “processing” fees for any other customers, including those who pay by check or via automatic debit payment. Charging debt collection or similar fees not expressly mentioned in the mortgage contract is unlawful and, under West Virginia mortgage servicing regulations, explicitly forbidden.
The coalition opposes the proposed settlement arguing it would not only permit PHH to continue to charge the unlawful fees, but also would allow it to actually increase fees — up to $19.50 per month — for the remaining life of the loan, which, for many homeowners, could be another 20 to 30 years.
The coalition further objects to the inadequacy of the monetary relief, as the proposed settlement is designed to ensure that a portion of the monetary relief intended for homeowners will actually end up in PHH’s hands.
Furthermore, homeowners whose loans are still serviced by PHH will not receive any direct monetary payments for prior unlawful payments received by PHH.