By Carolina Bolado, Law360 | August 26, 2020
A proposed class of consumers who had mortgages with Ocwen Loan Servicing LLC and PHH Mortgage Corp. told a Florida federal court Tuesday they had agreed to a $12.6 million settlement that will end their claims that the mortgage servicers charged illegal processing fees for payments made online or over the phone.
Under the terms of the deal, consumers will be refunded up to 28% of any fees they paid when they made online or phone mortgage payments during the class period. The fees were either $7.50 and $17.50, according to the complaint filed in March that accuses the defendants of violating the Fair Debt Collection Practices Act.
“Given the immediate and substantial benefits the settlement will provide, there is no question that the settlement is ‘within the range of reasonableness’ and warrants preliminary approval,” the plaintiffs said in the motion for preliminary approval.
Ocwen and PHH — which merged in 2018 — agreed to set up a $12,587,048 settlement fund, of which 30% is proposed to be set aside for plaintiffs’ attorney fees and costs, according to the motion.
Class members whose home mortgage loans were not owned by Ocwen or PHH and began being serviced by the companies when the loans were more than 30 days delinquent will receive refunds of 28% of the convenience fees they paid. Other class members will receive 18% of the fees they paid, according to the motion.
The class period runs from March 25, 2016, to Aug. 21, 2020, according to the motion.
Adam Moskowitz, who represents the proposed class of consumers, said those whose mortgages are still being serviced by the defendants — estimated to be about 80 percent of the class — will see the refunds applied automatically to their accounts. Those whose loans are no longer being serviced by Ocwen and PHH will need to file proofs of claim to get their refunds.
In addition to the cash payments, the defendants have agreed to a more than 13 percent reduction on the amount that can be charged for online payments and a three-year freeze on those charges. They also agreed to freeze the amount that can be charged for telephone payments for three years and to improve disclosures on their websites about the convenience fees.
The plaintiffs filed the suit on March 25, just as the coronavirus pandemic was taking hold in the United States and shutting down courthouses and schools. The mediation process, which took three months, was conducted entirely on Zoom, according to Moskowitz, who said the format allowed the parties to reach a resolution more quickly.
The mediator had the parties speaking to each other on Zoom every other day, which helped move negotiations forward, according to Moskowitz.
“To put everybody in a room and have everybody travel to another state, it’s kind of archaic,” he said. “Now we can all be in a mediation room in a matter of seconds at no cost. It was just a much more efficient procedure.”
An attorney for the defendants did not respond to a request for comment Wednesday.
The plaintiffs are represented by Adam M. Moskowitz, Howard M. Bushman and Joseph M. Kaye of The Moskowitz Law Firm PLLC and Josh Migdal and Yaniv Adar of Mark Migdal & Hayden.
PHH is represented by Michael R. Pennington and Timothy Allen Andreu of Bradley Arant Boult Cummings LLP.
The case is Morris v. PHH Mortgage Corp., case number 0:20-cv-60633, in the U.S. District Court for the Southern District of Florida.
–Editing by Bruce Goldman.
