25 April 2024 – In a significant victory for homeowners, a D.C. federal judge has given final approval to a nearly $3.6 million class action settlement resolving claims that Mr. Cooper, one of the country’s largest home loan services, unlawfully charged processing fees to borrowers who made mortgage payments over the phone (“pay to pay fees”).
The settlement, which was preliminarily approved in November, provides relief to Washington, D.C., and nationwide mortgagors who paid a fee to Mr. Cooper (formerly Nationstar Mortgage LLC) to make loan payments by telephone. The fees, which plaintiffs alleged violated several federal and state consumer protection laws, were as high as $19 per transaction.
U.S. Magistrate Judge Zia M. Faruqui, who presided over the case in the U.S. District Court for the District of Columbia, described the settlement as providing “exceptional relief” to the class members.
The settlement marks the end of a four-year legal battle that began in January 2020 when homeowners filed a class action lawsuit against Mr. Cooper. The company, based outside Dallas, Texas, stopped charging the convenience fees in 2022 and has agreed to refrain from collecting or charging such fees for an additional six months following the settlement’s final approval.
“This case was hard-fought for four years, and we are pleased that the Court recognized the excellent value this settlement provides to class members,” said Kristen Simplicio, a partner at Tycko & Zavareei.
The class was represented by Hassan A. Zavareei and Kristen G. Simplicio of Tycko & Zavareei LLP and James L. Kauffman of Bailey & Glasser LLP.
The case is McFadden et al. v. Nationstar Mortgage LLC, Case No.: 1:20-cv-00166, in the U.S. District Court for the District of Columbia.