Bailey & Glasser, LLP Wins Summary Judgment for Texas Borrowers over Illegal “Pay-to-Pay” Junk Fees
For more information, contact: James Kauffman, Bailey & Glasser, LLP, 202.463.2101, jkauffman@baileyglasser.com
September 28, 2023
Washington, D.C.: Bailey & Glasser, LLP, on behalf of a class of consumers who were charged illegal fees just for paying their mortgages over the phone, won a significant summary judgment victory in a class action before a federal district court in Houston, Texas. The lawsuit against Lakeview Loan Servicing and LoanCare, LLC alleges that they charged FHA mortgage borrowers illegal “Pay-to-Pay” fees, extra charges of up to $12 for processing monthly payments by phone.
The Bailey Glasser team, led by partners James Kauffman and Elizabeth Ryan, originally brought this case in May 2020, asserting that the collection of Pay-to-Pay junk fees violated the Texas Debt Collection Act (TDCA).
In Tuesday’s ruling, the federal district court approved the award of summary judgment against Lakeview and LoanCare, and adopted a magistrate judge’s finding that the Pay-to-Pay fees were not authorized by any of the borrowers’ loan agreements or permitted by law. Additionally, the District Court appeared to take issue with the defendants’ shotgun objections to the Magistrate Judge’s report by stating: “[i]t isn’t enough to dump a multifarious collection of issues on the district court, that essentially says, ‘Here, you figure it out.’”
“This case is a big win for American consumers who struggle enough without being nickel-and-dimed by illegal junk fees,” said lead counsel James Kauffman. “These kinds of fees are unlawful, and we will continue to fight across the country to protect consumers from companies taking advantage of them.”
During this litigation, Lakeview and LoanCare waffled on any long-term commitment to stop charging “Pay-to-Pay” fees, but they contended that no injunction was necessary because they voluntarily stopped collecting the fees. However, the Court’s ruling that Lakeview and LoanCare violated the TDCA will allow the plaintiffs to obtain a permanent injunction that will prevent the companies from ever collecting these fees again in Texas.
Other members of the Bailey Glasser team consisted of Contingency Practice Area Leader Jonathan Marshall, Consumer Litigation Practice Group Leader Patricia Kipnis, attorney Denali Hedrick, and paralegals Mary McClay and Vanessa Pierre. Co-counsel for the plaintiffs include Randy Pulliam and Lee Lowther of Carney Bates & Pulliam in Little Rock, Arkansas, and Fred Hagans of Hagans Montgomery Hagans in Houston, Texas.
The opinion is Williams v. Lakeview Loan Services, LLC, et al, Case No. 20-1900, and a copy of the District Court’s published opinion and the Magistrate’s Ruling may be found below.