Click Fraud Protection TZ Files Class Action Complaint on behalf of PHH Mortgage Borrowers Alleging Egregious Pay-to-Pay Fees - Tycko & Zavareei LLP
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TZ Files Class Action Complaint on behalf of PHH Mortgage Borrowers Alleging Egregious Pay-to-Pay Fees

Date Published
Feb 24, 2023

February 23, 2023. Tycko & Zavareei LLP is taking legal action against PHH Mortgage Services on behalf of its customers. The class action lawsuit alleges that the mortgage servicer has profited from unfair and illegal upcharges for routine mortgage servicing activities. It also claims that PHH’s business practices have violated contract, breached the covenant of good faith and fair dealing, committed violations under New York General Business Law and the Illinois Consumer Fraud and Deceptive Business Practices Act, as well as unjustly enriched the mortgage servicer.

At issue is PHH’s practice of charging borrowers pay-to-pay fees in the form of convenience or processing fees to pay their mortgages online or over the phone, even though it costs PHH much less to process these electronic payments than traditional check payments. The captive audience of customers end up paying fees of up to $19.50 when they pay via EFT, adding up to millions of dollars in profits for PHH. These fees are not authorized in borrowers’ mortgage agreements, but PHH has quietly begun sending borrowers note amendments that purport to authorize Pay-to-Pay fees for the duration of the loan and may even give PHH the right to impose these fees on borrowers who make payments via a reoccurring monthly ACH debit. Furthermore, PHH services loans which lower-income borrowers obtain through the Federal Housing Administration, and the FHA “does not permit arbitrary and unreasonable costs to be imposed on borrowers,” yet borrowers face additional burdens from pay-to-pay fees.

Because of the cost savings to them, most mortgage servicers allow borrowers to pay their mortgages online and over the phone without a fee. But consumers do not get to choose their mortgage servicer, and those assigned to PHH are unable to seek out a better deal. Because of that, federal and state regulators have described the Pay-to-Pay fees charged by mortgage services as unfair junk fees.

With the class action lawsuit, TZ is seeking an end to PHH’s pay-to-pay fees and other practices that violate customers’ rights. If successful, consumers who have paid the pay-to-pay fees and other illegal fees may be eligible to receive compensation.

If you believe you have been wrongfully charged pay-to-pay fees or other illegal fees by PHH Mortgage Services, contact Tycko & Zavareei LLP today. We are committed to fighting for justice and compensation for those who have been harmed.

The case is Anntwanette Jones and Lucinda Allard, et al. v. PHH Mortgage Corporation D/B/A PHH Mortgage Services, case no.: 1:23-cv-1040 in the United States District Court for the District of New Jersey.

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