Alexandria, VA Resident Claims Freedom Mortgage Corp. Failed to Make Mandatory Payments from Escrow Accounts

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An Alexandria, Virginia resident alleges in a proposed class action that Freedom Mortgage Corporation’s non-payment of city property taxes in 2017 caused him significant financial distress. The 14-page complaint alleges the defendant overstepped the Real Estate Settlement Procedures Act of 1974 (RESPA), which the lawsuit says demands mortgage servicers who administer payment from escrow accounts to “make timely payments of property taxes from said account as said taxes come due.”

The complaint explains that the defendant began servicing the plaintiff’s mortgage after it was transferred from NYCB Mortgage Company, LLC in October 2017. The plaintiff alleges that non-party NYCB failed to make the first installment payment of the 2017 Alexandria City property tax and that Freedom Mortgage then failed to make the second installment payment for the same year’s tax calendar. These failures allegedly occurred even though the plaintiff’s escrow account held more than enough money to cover the second installment payment of $4,102.14, the lawsuit says.

As a result of the above-described non-payments, the plaintiff was reportedly hit with late fees from the city of Alexandria and saddled with “significant additional federal and state income tax liability” for 2017. More specifically, the plaintiff claims his total federal income tax bill for 2017 (which has been paid in full) reached $42,174 when it should’ve only been $41,515, the complaint says, with his state income tax obligation displaying a similar discrepancy.