Nationstar Mortgage Hit with Class Action Over Scores of Allegedly Unauthorized Account Debits [UPDATE]

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A proposed class action alleges Nationstar Mortgage has withdrawn without authorization “enormous sums” of money from borrowers’ bank accounts by way of scores of improper debit requests that the company should have been able to identify. 

The 17-page complaint claims Nationstar has this year submitted hundreds of thousands of improper Automatic Clearing House (ACH) debit transaction requests even though each borrower making payments on a mortgage should appear on only one batch file of such requests per month.

For example, Nationstar or its agents, the suit alleges, initiated four debit requests to the plaintiff’s bank in April 2021, and some borrowers, per the case, have had as many as six ACH debit requests sent to their receiving depository financial institutions, resulting in the defendant withdrawing from proposed class members’ accounts amounts far in excess of what’s permitted. 

“Upon information and belief, some borrowers had as much as $50,000.00 taken by Nationstar through unauthorized ACH debits,” the complaint, filed in New York on June 15, says. 

According to the suit, Nationstar allows borrowers to authorize it to initiate automatic recurring debit entries once per month equal to the required monthly periodic payment for their respective loans. This allows the debt collection process, initiated through ACH payments, to run “smoothly, efficiently, and (theoretically) safely,” the lawsuit says. 

Loan originators such as Nationstar initiate each month ACH transfers through their originating depository financial institution (ODFI) or third-party agent, according to the complaint. Borrowers’ banks, per the suit, are referred to as “receivers” given they receive the ACH transfer request. Upon information and belief, Nationstar or its agents will typically submit a batch file or files through the ACH Network to initiate debits from borrowers’ accounts, the suit relays. 

Although each borrower who makes a payment pursuant to a mortgage should appear on only one batch file per month, on a pre-ordained schedule they’ve authorized, Nationstar has submitted in 2021 “hundreds of thousands of improper ACH debit requests,” the case alleges. 

The plaintiff claims that she was left “without purchasing power” while Nationstar’s “payment processing failures” were being looked into, and she and similarly situated borrowers were deprived of interest on their savings as a result of the defendant’s unauthorized ACH debits, the case alleges.

Per the suit, Nationstar has unlawfully collected “tens of thousands” of unauthorized payments from borrowers whose mortgages it services, and withdrew excess funds from “over 480,000 accounts across the country.” The defendant, the case asserts, failed to have in place measures to ensure that pre-authorized transactions only occurred monthly and to detect abnormalities in ACH debit transactions prior to the transactions being settled. 

“As a result of the foregoing, Plaintiff and Class Members were deprived of interest that would have accrued on their personal funds had Nationstar not withdrawn those funds without authorization,” the suit alleges.

The lawsuit looks to represent all consumers in New York whose mortgage loans were serviced by Nationstar and who had funds in excess of a single monthly payment withdrawn from their account within the applicable statute of limitations period through the date the complaint was filed.

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