Facts

Rushmore Loan Management Services LCC is a loan servicer that is headquartered in California and services loans around the country. As part of its regular business, it collects on residential mortgage loan debts, including mortgage loan debt that is past due and/or delinquent, from residential mortgage holders. Phitsamay Fernandez brought a class action against Rushmore on behalf of a class of mortgagees with a mortgage loan serviced by Rushmore, from whom Rushmore collected a convenience fee during the period of January 1, 2013 through September 19, 2021.

PLAINTIFF'S CONTENTIONS: Plaintiff contended that defendant charged borrowers convenience fees when they made their monthly mortgage payments over the phone through a live agent or interactive voice response. Specifically, defendant charged a $5.00 fee when borrowers made payments by telephone using defendant's automated phone payment system, and a $10.00 fee when borrowers made payments by speaking with defendant's customer services representatives by telephone. Plaintiff argued that defendant charged borrowers these fees for payments made by telephone that far exceeded the actual costs of the telephone transaction services defendant utilizes, and pocketed the difference between the fees it charged to borrowers and the significantly lower costs it paid to provide telephone payment services, thereby profiting from the inflated fees it charged to borrowers. Plaintiff alleged that these fees violated the federal Fair Debt Collection Practices Act, state debt collection laws, and California's Unfair Competition Law, and breached contracts with borrowers. Plaintiff contended that defendant breached its contracts with plaintiff and class members when it charged fees not agreed to in their uniform mortgage agreements, specifically prohibited by their mortgage agreements, and in excess of the amounts actually disbursed by defendant to pay for the cost of pay-to-pay transactions.

DEFENDANT'S CONTENTIONS: Defendant denied all contentions.

Result

The case settled for $1,645,840.