Arkansas Homeowner Files Suit Over Allegedly Improper Foreclosure, Associated Fees

New to ClassAction.org? Read our Newswire Disclaimer

A proposed class action against Mickel Law Firm, U.S. Bank N.A., Wells Fargo Home Mortgage, and a Citigroup Trust claims the defendants unlawfully commenced foreclosure proceedings against and charged improper fees to an Arkansas homeowner.

The complaint begins in July 2006, when the plaintiff and her former husband took out two mortgage loans with non-party New Century Mortgage for the purchase of their home. In 2007, the case continues, New Century filed for bankruptcy, and its assets were eventually transferred to a liquidating trust. The complaint alleges that years later, New Century purported to assign the plaintiff’s first mortgage to U.S. Bank N.A., the trustee for the Citigroup Trust, and the second mortgage to Residential Funding Company, LLC. According to the suit, these transactions were “false and palpably improper” in that they attempted to transfer rights from a liquidated entity.

On April 26, 2017, the lawsuit goes on, U.S. Bank filed a Notice of Default and Intention to Sell against the plaintiff’s first mortgage that was executed by Mickel Law Firm. In response to the foreclosure proceedings, the plaintiff requested a reinstatement quote from Wells Fargo that the bank sent on June 12, 2017, the suit says. The quote supposedly listed a total amount the plaintiff needed to pay to reinstate the loan, including various fees associated with the foreclosure proceedings.

“As the default and foreclosure were improperly commenced,” the complaint states, “these amounts were not due, and the representations that these amounts were owed were false.”

On top of that, the lawsuit claims the defendants filed a Limited Power of Attorney on June 14, 2017, by which Wells Fargo appointed Mickel Law Firm as its attorney-in-fact for the purpose of executing the plaintiff’s foreclosure. The case points out that the law firm had commenced the woman’s foreclosure well before being authorized to do so.

The plaintiff reportedly paid the amount requested in the reinstatement quote on June 26, 2017, the day before her home was scheduled to be sold. The payment included a slew of unlawful charges, the complaint alleges, such as fees for “recording costs,” “title updates,” “sale costs and publication,” “title policy,” “post sale notice,” “recording fees,” and “attorney fees.” The lawsuit argues that the defendants collected these fees unlawfully, as they were associated with a foreclosure that was improperly executed. The fees themselves, the lawsuit claims, were in excess of “the amounts allowed under the Fee Agreement between the other Defendants and the Mickel Firm, and/or governing Fannie Mae and Freddie Mac standards.”