Countrywide Faces Payoff Fee Lawsuit in New Jersey Case
A statewide class-action lawsuit has been brought against Countrywide Home Loans Inc., one of the nation's largest providers of residential mortgages, for allegedly violating the New Jersey Consumer Fraud Act.
The lawsuit, filed in Middlesex County Superior Court here, claims individual consumers in New Jersey were illegally charged a $60 statement fee when requesting a written payoff calculation required for closing. The fee is allegedly a violation of the act, according to the class action.
The New Jersey act, one of the most protective consumer laws in the nation, prohibits businesses from engaging in unconscionable commercial practices, deception and fraud aimed at consumers.
The case could affect more than 10,000 New Jersey residents, according to Carolyn Lindheim, a partner with Levy, Angstreich, Finney, Baldante, Rubenstein and Coren PC, in Cherry Hill, N.J., who is representing the consumers.
"The claim we make is that Countrywide Home Loans Inc. charged a customer $60 to fax them a written payoff statement," Ms. Lindheim said.
"The company's position is that they have a right to charge this inflated fee because you could simply ask for a payoff amount over the phone or via the Internet. But, title companies will not accept a verbal or unofficial number when they are conducting a closing on a home or a mortgage payoff. So, the only way you can pay off your mortgage is to get a written payoff statement and to get that, the consumer had to pay the $60."
Steven Angstreich, who also represents the consumers, said there are a number of states in the country where Countrywide continues to charge $30 to $60 for payoff statements. In some states, he said, borrowers aren't charged a thing, because state law prohibits charging consumers for the statement.
Mr. Angstreich said Countrywide has settled two other class-action lawsuits regarding the same issue, which resulted in $900,000 in payoffs. "It's very interesting. In both class actions, Countrywide was never required to stop the practice. The remedy didn't include them agreeing not to charge for written payoffs. It continued," he said.
"Hopefully, this litigation will result in the practice coming to an end. It's silly to charge someone $60 to fax a letter. A $10, $12, $15 or $30 charge is reasonable. Who is going to sue for that? But when they charge that much to a lot of people, it comes out to a huge amount of dollars." A spokesperson for Countrywide said the company does not comment on pending litigation.
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