Mr. Cooper Charged Unlawful Fees for Releasing Mortgages, Class Action Alleges

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A proposed class action lawsuit claims Nationstar Mortgage LLC (who does business as Mr. Cooper) charged mortgage borrowers in certain states unlawful fees for releasing their mortgages.

Did you receive a data breach notice from Mr. Cooper? Let us know here.

According to the eight-page case, Mr. Cooper, as the mortgagee or agent-servicer of mortgagees, has charged borrowers unlawful “third party reconveyance preparation,” “third party reconveyance/release preparation” or similar fees when they’ve satisfied their mortgages. Per the suit, these fees are not permitted under the terms of borrowers’ mortgages, and the defendant has thus breached the terms of its contracts with mortgage borrowers.

As the case tells it, the mortgages at issue were standard written contracts that stated the defendant may charge a borrower a fee for releasing their mortgage, but only if that fee is paid to a third party for services actually rendered and is permitted under applicable law. Per the suit, the applicable laws in 35 states and the District of Columbia do not allow lenders to charge any fees other than government fees for the release of satisfied mortgages.

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In Ohio, for example, state law allows the mortgagee, such as Mr. Cooper, to recover only the cost of the fees paid to the county recorder for recording the satisfaction of a mortgage, the lawsuit relays.

Per the case, Mr. Cooper’s charges for third-party reconveyance preparation or similar fees are not permitted under the applicable laws in Alabama, Arizona, Arkansas, Connecticut, District of Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Massachusetts, Mississippi, Montana, Nebraska, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin and Wyoming.

The lawsuit looks to require Mr. Cooper to pay back “these breach-of-contract overcharges” to anyone who was charged by Nationstar (or any predecessor, successor, nominee or agent) any third party reconveyance preparation fee, third party reconveyance/release preparation fee or similar fee, except where applicable law expressly allows for such fees and they were charged for amounts actually paid to third parties for releasing services.

Did you receive a data breach notice from Mr. Cooper? Let us know here.