NewsCharged Too Many Fees

October 14, 2019

Charged a fee just because you paid your mortgage online or over the phone?

Many homeowners may be familiar with being charged a “convenience fee” for making their mortgage payments over the phone or online. These pay-to-pay fees or processing fees are almost always unlawful. Other well-known names for these online payment fees are:

  • Speed-pay fees
  • Convenience fees
  • Processing fees
  • or Pay-to-Pay fees

Fee amounts will vary depending on the lender, but some borrowers have reported being charged $5, $10, or even $15 per transaction. Although convenience fees are common with online bill pay, under most mortgage agreements such fees are not allowed.


Online & Phone Mortgage Payment Fees

There’s a good chance it the past few years you’ve ordered movie tickets online and been charged a convenience fee for doing so, and for the most part probably don’t mind.  It’s not uncommon for companies to charge convenience fees when consumers make a purchase using an alternative method which may be more convenient.

While convenience fees are typically legal, mortgage lenders may be in violation of mortgage agreements by charging their clients convenience fees when making payments online or over the phone.


Mortgage Payment Fees Class Action Lawsuit

Across the country, homeowners have brought suit against their mortgage servicers for assessing excessive fees simply to pay their mortgages. One example of this is a group of homeowners in Florida who filed a class action lawsuit against Seterus Inc. alleging that they were charged illegal convenience fees that violated their mortgages as well as state and federal law. They claimed they were charged $5.00 fees for paying their mortgages online and $10.00 for paying their mortgages over the phone. According to the lawsuit, their mortgage agreements do not allow Seterus to charge these “excessive” fees. The lawsuit alleges that Seterus leverages its position of power over homeowners and demands excessive Convenience fees, despite its uniform contractual obligations to charge only fees explicitly allowed under the mortgage, applicable law, and only those amounts actually disbursed.

A second example of homeowners fighting back against their mortgage servicers would be a California woman who filed a class action suit against M&T Bank based on the $15.00 fees that they charged her to make her mortgage payment. According to the mortgage payment fee class action, M&T’s mortgage agreements do not allow them to charge these “excessive” fees. Since M&T acquired her mortgage loan in default it is considered a debt collector. This reportedly means that M&T Bank is subject to debt collection standards under the Fair Debt Collection Practices Act (FDCPA) and the California Rosenthal Fair Debt Collection Practices Act, the mortgage payment fee class action lawsuit alleges.

The FDCPA generally prohibits abusive debt collection practices while the Rosenthal Act specifically forbids collecting “the debt collector’s fee or charge for services rendered.” Additionally, any violation of the FDCPA violates the California law. There have been similar lawsuits filed in North Carolina and New York.


Have you been charged a “Convenience fee” for making your mortgage payment over the phone or online?

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