Mr. Cooper Withdraws Mortgage Payments Without Authorization, Class Action Claims

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Two homeowners have filed suit against Nationstar Mortgage LLC, which does business as Mr. Cooper, after the mortgage servicer allegedly made several unauthorized electronic fund transfers from their account.

The case explains that shortly after the plaintiffs closed on the purchase of their Wisconsin home, the servicing rights for their mortgage were transferred to non-party Pacific Union Financial, LLC (PUF). The plaintiffs allegedly authorized PUF to initiate electronic fund transfers every other Friday in an amount equal to half of each monthly mortgage payment.

The arrangement continued without issue for about two years, the complaint says, until PUF was acquired by Mr. Cooper. The plaintiffs say they received a letter in February 2019 informing them that the servicing rights for their loan had been transferred to the defendant yet received no advance notice of the transfer nor an opportunity to discuss their prior payment arrangement with the defendant or their bank.

Despite Mr. Cooper’s assurance that the terms of their mortgage would remain the same, the plaintiffs allegedly discovered that the loan servicer had initiated an electronic fund transfer on Monday, February 11, 2019, instead of on the scheduled payment date of Friday, February 15. The withdrawal apparently caused the plaintiffs’ bank account to be overdrawn, resulting in a $34 overdraft fee.

After informing Mr. Cooper of the “big mistake,” the plaintiffs, the suit goes on, were reimbursed for the overdraft fee and told that the problem would be corrected. Nevertheless, the case says, the defendant continued to transfer payments from the plaintiffs’ account on days other than those on which payment was authorized.  

In April 2019, the case continues, Mr. Cooper withdrew an amount the plaintiffs believe to be a full month’s mortgage payment just one day after initiating a transfer for the previous month’s second payment. The unauthorized transfer caused “a ripple effect” that resulted in at least three overdraft fees, the case alleges. The defendant, after being informed of the mistake, only refunded the plaintiffs for half of the unauthorized transfer and one overdraft fee, despite having just withdrawn a payment only one day earlier, the suit says.

The lawsuit claims Mr. Cooper violated both the Real Estate Settlement Procedures Act (RESPA) and the Electronic Fund Transfer Act (EFTA) by making the unauthorized transfers without providing proper notice to the plaintiffs.