Class Action Claims LoanCare Withheld Critical Mortgage Info from Borrowers Dealing with ‘Errors’

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LoanCare, LLC faces a proposed class action wherein four borrowers allege the company erroneously considered, and still considers, their mortgages past due even though they’ve paid the obligations as instructed each month. 

According to the 26-page case, LoanCare has also “inexplicably” refused to turn over to the plaintiffs certain account records they requested with relation to the company’s apparent errors, much less conduct a “reasonable search” for the information. As a result of LoanCare’s alleged conduct, the plaintiffs were deprived of their legal right to review account notes that the defendant relies on in deciding how to treat loans, including representations about payment information, the suit claims. 

Per the complaint, the plaintiffs “experienced no known issues with their prior servicers” yet “all experienced errors” once their mortgages were transferred to the defendant. 

The suit, filed in Virginia on September 27, contends that LoanCare’s production of servicing notes to the plaintiffs would have allowed them to investigate and determine why the company considered their accounts late or, in other words, to find out where LoanCare erred. LoanCare has run afoul of the federal Real Estate Settlement Procedures Act, a statute that, among other purposes, aims to provide mortgage borrowers with timely access to transparent and accurate servicing practices. 

“Had LoanCare simply complied with its investigative obligations under the Real Estate Settlement Procedures Act (‘RESPA’), it would have provided the requested information—which was easily accessible; not confidential, proprietary, or privileged; and not burdensome to produce—to Plaintiffs and the class members,” the lawsuit charges. 

The case moreover argues the documents LoanCare could have produced would have been particularly useful to the plaintiffs as far as providing instructions on when to remit payment and to whom, and aided the borrowers in better articulating their disputes to the company. Further, information from LoanCare could have helped the plaintiffs by serving as evidence of inaccuracies in their credit reports, the suit says, adding that the federal Fair Credit Reporting Act grants borrowers additional protections with regard to the furnishing of “derogatory, erroneous information” by mortgage servicers. 

“LoanCare, of course, did not fix its errors on its own, giving rise to Plaintiffs’ individual RESPA claims,” the complaint reads. 

According to the filing, the plaintiffs disputed LoanCare’s servicing of their mortgages by sending qualified written requests to the company. In response to the plaintiffs’ letters, LoanCare “failed to both investigate Plaintiff’s [sic] qualified written requests and correct its servicing errors in response to the letters,” the suit claims.

The case alleges the plaintiffs have been saddled with erroneously assessed late fees and had their credit reports negatively impacted due to LoanCare’s supposed conduct. 

The lawsuit looks to represent all consumers who, within the last three years, submitted qualified written requests to LoanCare at its designated address requesting servicing notes that were not provided in response to the request. 

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