Paramount Residential Mortgage Group Hit with Class Action Over Alleged Handling of Dispute, Error Notices

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Paramount Residential Mortgage Group has ignored its statutory duty to stop sending adverse information to consumer reporting agencies regarding payments owed once it’s notified of a dispute, a proposed class action alleges. 

The 22-page lawsuit, filed in the District of Columbia, claims Paramount Residential has run afoul of the Real Estate Settlement Procedures Act (RESPA) by continuing a “pattern and practice” of sending information concerning overdue payments owed by a borrower or related details despite being prohibited from doing so for a 60-day period from the date on which it receives a qualified written dispute or notice of error. 

“it simply continues the disputed, adverse reporting with knowing and reckless disregard to the rights of the Plaintiffs and Class members,” the case alleges. 

The plaintiff, a Washington, D.C. resident, alleges Paramount Residential “places its interest and pattern of unsafe and unsound mortgage service practices above the remedial rights of homeowners and consumers” and unfairly and deceptively ignores its statutory and contractual duties to conduct a reasonable investigation upon being notified in good faith of errors. 

According to the complaint, Paramount Residential claims to have sent the plaintiff periodic statements about his loan from September through December 2020, yet the man asserts he never received any notice. The lawsuit claims that although the plaintiff has made timely payments within each grace period, the defendant has falsely reported to credit agencies that he has not and is otherwise delinquent. 

In response to the plaintiff’s February 2021 qualified written dispute/notice of error, Paramount Residential failed to correct errors related to the man’s mortgage account and “continued to claim he owed it sums which he did not owe,” the complaint claims. Further, Paramount Residential did not suppress the negative credit reporting information under dispute despite being required by law to do so, and failed to conduct any reasonable investigation into the plaintiff’s inquiry whatsoever, the suit alleges. 

Moreover, the defendant provided no response to the plaintiff’s dispute, except to acknowledge in a written correspondence that it received the man’s qualified written dispute/notice of error and would “promptly review [the] inquiry, complete research, and respond within 30 business days,” the lawsuit says. Despite this promise, however, Paramount Residential did not promptly review the plaintiff’s dispute, complete any research or respond within 30 business days, the suit claims, charging that the company instead “ignored” the man’s notice of error and “continued its incorrect, false, and negative servicing” of the mortgage. 

The harm suffered by proposed class members stems from Paramount Residential’s publishing of “derogatory,” under-dispute information to credit reporting agencies, the lawsuit summarizes. The case says the defendant’s failure to “correct its errors and perform any reasonable investigation” has led the plaintiff to incur economic and non-economic damages in the form of lost payments received and realized by Paramount Residential for which the man has not been given credit and emotional damages manifested in “anger, anxiety, frustration, and fear” that the defendant “intends to try to take his home” on the basis of false pretenses. 

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