Class Action Alleges Specialized Loan Servicing Charges Unlawful Fees for Over-the-Phone Mortgage Payments

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A Texas man claims in a proposed class action that Specialized Loan Servicing LLC has charged unlawful fees for mortgage payments made over the phone. The lawsuit alleges these “pay-to-pay” fees are not authorized by customers’ mortgage agreements nor permitted under federal and Texas law.

According to the 18-page complaint, the Colorado-based loan servicer charges homeowners a $7.50 fee for over-the-phone payments made through an Interactive Voice Response (IVR) system and a $12.50 fee for payments made by phone with a customer service representative. The suit alleges that these amounts are “above and beyond” the cost to SLS for providing such services, which the case says is typically about $0.50 per payment. Texas law, according to the complaint, prohibits the defendant from marking up the price it charges to third parties for payment services in order to “create a profit center for itself.”

The lawsuit further argues that the defendant is barred by federal and state laws from charging fees “that are not explicitly included in the mortgage agreement.” Pay-to-pay fees, the suit says, are not authorized by customers’ mortgage agreements with Specialized Loan Servicing and are therefore unlawful.

Finally, the case alleges that Specialized Loan Servicing, as a Federal Housing Administration-approved lender, may not charge fees that exceed the amounts authorized by the U.S. Department of Housing and Urban Development (HUD). According to the suit, the defendant’s pay-to-pay fees, which allegedly exceed the company’s out of pocket costs by “several hundred percent,” are not included in the HUD’s “exhaustive list” of allowable charges and fees.

The lawsuit seeks to certify two proposed classes:

The complaint can be read below.