Class Action: Dovenmuehle Mortgage Unlawfully Hindered Homeowners Seeking Forbearance During COVID-19 Crisis

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A proposed class action alleges that Dovenmuehle Mortgage Inc. (DMI) violated “the letter and spirit” of the Coronavirus Aid, Relief, and Economic Security (CARES) Act by imposing additional requirements and restrictions on those seeking to obtain a mortgage loan forbearance during the COVID-19 crisis.

The CARES Act, the lawsuit explains, was passed on March 27, 2020 as a means to provide relief to Americans struggling to shoulder the economic fallout caused by the pandemic. Among its provisions, the Act provided an opportunity for homeowners with federally backed mortgages to request a forbearance for up to 180 days, with an extension of another 180 days available, the suit says. The only requirement, according to the case, was that homeowners claim they are suffering “a pandemic-related financial hardship.” Importantly, the Act expressly specified that there was “no additional documentation required” aside from homeowners’ attestation, the suit adds.

The lawsuit alleges that mortgage servicer DMI failed to adhere to the clear provisions of the CARES Act and, rather than granting a 180-day forbearance and 180-day extension to qualified homeowners, offered a 90-day “forbearance plan” subject to proper documentation.

The plaintiff in the case is a 70-year-old California woman who says she submitted via email a request for forbearance to DMI on April 3, 2020. The next day, the suit says, the plaintiff received an email from DMI in which the mortgage servicer stated that her “90 day forbearance plan has been activated on our system.” The plaintiff subsequently received two letters from DMI—one confirming that the defendant had received her request and the other providing an “Approved Forbearance Agreement,” the case states.

The lawsuit explains that under the agreement, DMI required, among other things, that the plaintiff certify she was in “imminent danger of not making the [next] monthly payment,” which the case says placed an additional burden on the plaintiff that was expressly forbidden under the CARES Act.

“By unilaterally restricting the forbearance period from 180 days to 90 days, failing to grant the requested 180-day extension, and requiring that Plaintiff execute the extraneous ‘Approved Forbearance Agreement’ and certifications therein, DMI has violated the letter and the spirit of the CARES Act,” the complaint states, adding that the defendant has likely imposed the same restrictions and requirements on other homeowners.

The case, which alleges violations of several California laws, looks to represent all homeowners with a federally backed mortgage serviced by DMI in the U.S.

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