The law firms of Mehri & Skalet and Sprenger + Lang have filed a multi-claim, nationwide class action lawsuit in the United States District Court for the District of Minnesota against Homecomings Financial, LLC. The complaint alleges that Homecomings, which is based in Minneapolis, MN, has engaged in a nationwide scheme of illegal, unfair, unlawful, and deceptive business practices that violate both federal and state laws in the servicing of home-secured loan transactions.
According to the complaint, Homecomings is one of the nation’s largest mortgage servicers. Homecomings services the mortgages of more than 800,000 households nationwide. The complaint alleges that Homecomings routinely tries to collect, and in fact does collect, improper fees and charges from homeowners, including charges for unnecessary and unauthorized property inspections, and unauthorized and excessive fees for using its electronic payment processing services.
The complaint further alleges that Homecomings engages in the practice of “force-placing” hazard insurance, that is, purchasing insurance for the borrower’s property and charging the borrower for it. In many cases, Homecomings force-places insurance even though the property is already insured. In addition, Homecomings fails to obtain insurance at competitive prices.
Homecomings assesses these improper fees, costs, and charges to maximize its profits, often putting homeowners into default status, according to the complaint. Then, it demands payment from the homeowners on the improper charges, collecting them from homeowners’ monthly loan payments, loan payoffs, and even through foreclosure sales. The plaintiffs allege that Homecomings treats borrowers as if they are in default even when they have complied with the terms of their mortgage agreements.
“With the state of today’s economy and housing market, it’s all people can do to pay their mortgages in the first place,” said Steve Skalet of Mehri & Skalet, one of the attorneys for the homeowners. “The last thing people need is hurdles that keep them from making their mortgage payments, or, even worse, not getting credit for the payments they do make.”
“The allegations made by our clients indicate a pattern of misconduct by Homecomings that is illegal, unfair, and very disturbing. No one ought to lose their house because of a mortgage company’s misdeeds,” added Steve Sprenger, an attorney for the homeowners with Sprenger + Lang, another law firm representing the homeowners.
The plaintiffs bringing the lawsuit are residents of California, Illinois, Michigan, Kentucky, and Florida. The lawsuit was filed on behalf of all persons nationwide whose home mortgages were serviced by Homecomings, and whose loans were improperly assessed late fees, or were wrongly assessed charges for force-placed insurance, unnecessary and unauthorized property inspections, and the use of Homecomings’ electronic payment processing service.
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