Mr. Cooper’s $25 cost to debtors for expedited payoff quote statements passes authorized muster, a federal judge dominated.
U.S. District Judge Barbara Jacobs Rothstein final week granted abstract judgment in favor of the lender and servicer within the client lawsuit that drew the eye of federal regulators. Plaintiffs have argued for over a 12 months that the fee, which Mr. Cooper discloses on its web site, violates state and federal client safety legal guidelines.
The final result was first reported by Law360.
In an 11-page order, Rothstein wrote the fee doesn’t break legal guidelines associated to debt assortment as a result of the precise cost “just isn’t a communication associated to accumulating a debt.”
The judge on the identical time denied as moot skilled testimony from topics together with a Mr. Cooper government. The sides got three weeks to debate the rest of the case, though it is unclear if the three named plaintiffs will file an enchantment.
An legal professional for plaintiffs declined to remark Wednesday, whereas neither opposing counsel nor a spokesperson for Mr. Cooper responded to requests for remark.
Why did debtors sue Mr. Cooper?
Consumers filed the lawsuit in Washington final April, alleging the “junk fee” ran afoul of the Fair Debt Collection Practices Act. They claimed the expedited payoff quote statements, which give debtors a disclosure quicker than TILA’s seven-day requirement, are processed “in a matter of seconds” and value Nationstar “pennies” in comparison with the $25 fee.
The Consumer Financial Protection Bureau weighed in final August, submitting a brief amicus temporary suggesting Mr. Cooper was violating the FDCPA by charging a fee prospects weren’t beforehand conscious of. The new-look regulator nevertheless in May withdrew its steering on the topic, and Rothstein allowed the bureau to withdraw its argument within the case.
Mr. Cooper all through the pleadings asserted the expedited supply of a payoff assertion was a further service contracted outdoors of the mortgage mortgage. It additionally reminded the courtroom it offers the statements without cost inside the statutorily allowed time-frame.
Plaintiffs final 12 months additionally tried so as to add Freddie Mac to the case, for purportedly turning a blind eye to the illicit fee. Counsel for the government-sponsored enterprise stated it requires servicers to adjust to relevant legal guidelines, and Rothstein rapidly dismissed Freddie Mac from the lawsuit.
The lawsuit is considered one of a number of so-called “pay-to-pay” disputes involving mortgage servicers in federal courts. Others, together with a criticism towards Newrez for expenses to debtors making funds through telephone, and one other towards Roundpoint Mortgage Servicing for doubtful late charges, stay pending.
