Is my mortgage company allowed to charge me a mortgage payment fee over the phone? If you made a mortgage payment by phone and were charged a fee for this service, the fee may have been in violation of state and federal law.
A number of class action lawsuits have challenged these “pay to pay” schemes, and mortgage companies (which already receive several times the original amount of the loan in repayment) have been held to account.
If you were charged a mortgage payment fee for paying your mortgage online or over the phone, you may qualify to join a FREE online payment mortgage fee class action lawsuit investigation. Contact Shamis & Gentile, P.A. today – file your claim here and our attorneys will contact you after we’ve reviewed your information.
What is “Pay to Pay” or “Convenience Fees”?
“Pay to pay” fees are a relatively new phenomenon the financial services sector and corporations selling subscription-based consumer services have implemented in order to increase their revenues even more. These fees go by several names, including:
- convenience fees
- processing fees
- speedpay fees
There does not appear to be any real justification for such fees; nonetheless, mortgage companies routinely charge customers anywhere from $5 to $25 a pop for the convenience of making a mortgage payment by phone or online.
Mortgage Payment Fee Legality
In some cases, pay-to-pay fees are not only illegal, they may violate a mortgage company or bank’s own contracts. Under most serving agreements, a mortgage company may only charge extra fees as may be necessary to cover their own costs of operation. However, this does not appear to be the situation in most cases.
One defendant in a recent class action lawsuit, Michigan-based Flagstar Bank, allegedly contracts with Western Union to process mortgage payments. The cost to the bank is between .20 and .40 cents, yet the California plaintiffs claim they are charging $15 for making a mortgage payment by phone. According to that complaint, Flagstar is not only violating Fannie Mae serving guidelines, they are in violation of their state’s Rosenthal Act, which prohibits debt collectors of any kind from charging fees to cover their expenses in collecting on the debt in question.
A similar complaint has also been filed against Freedom Mortgage, which claims that the defendant is violating federal law. The plaintiffs’ mortgage is insured by the Federal Housing Authority; under the agency’s rules, the loan servicer may only charge fees to cover their own out-of-pocket costs. According to that lawsuit, these possibly illegal practices have affected hundreds of thousands of consumers.
How Can I Avoid Paying Extra for Making a Mortgage Payment Fee Online in the First Place?
The Federal Trade Commission recommends that anyone who has a mortgage carefully read their billing statements in ensure that any extra charges or serving fees are legitimate. This includes any fees that you or the loan service may have authorized when the mortgage was originated. If there is anything you do not fully understand, you have the right to ask for a full explanation (you should do this in writing). If you do ask for services such as providing copies of loan documents or anything else, be certain you also ask if there are any associated fees as well as the amount.
In other words, if your mortgage company is charging you a fee for making a mortgage payment by phone or through its website, such fees must have been agreed to in advance. If they are not part of the original loan agreement, they are prohibited.
Join a Mortgage Payment Fee Class Action Lawsuit Investigation
If you were charged a payment fee for paying your mortgage online or over the phone, you may qualify to join a FREE online payment mortgage fee class action lawsuit investigation. Contact Shamis & Gentile, P.A. today – file your mortgage payment fee claim here and our attorneys will contact you after we’ve reviewed your information.