PNC Bank would have violated Fannie Maeof the COVID-19 payment deferral agreement by continuing to bill homeowners who have opted for the home retention option for overdue monthly principal and interest payments.
A nationwide class action lawsuit in federal court in Maryland claims the PNC twice billed borrowers for their overdue principal payments and thus inappropriately increased the amount of their mortgages.
Further, the lawsuit alleges that the class members who paid the deferred amounts earlier were billed twice the amount of overdue interest that PNC agreed to defer.
Deferment of payment, offered as a COVID-19 home retention option by Fannie Mae, Freddie mac and the FHA, updates a borrower’s mortgage and delays the repayment of certain monthly principal and interest payments. Missed payments are deferred at the end of a loan term or sooner if the home is sold, the property is transferred, or the loan is refinanced or otherwise paid off.
By allegedly continuing to bill homeowners despite the deal, the plaintiffs accuse the PNC of violating the federal Truth in Lending Act (TILA), in particular Regulation Z, which requires a creditor or manager of the loan. mortgage loan provides periodic mortgage statements that accurately disclose the amount of the outstanding principal balance.
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Additionally, the lawsuit alleges that PNC’s practices violated the Maryland Consumer Protection Act (MCPA). MCPA prohibits unfair and deceptive business practices in extending consumer credit and / or collecting consumer debt, such as making false or misleading statements.
The plaintiffs accuse the Pittsburgh-headquartered bank of “misrepresenting the fact that its deferral agreements would only delay or postpone payment of overdue amounts and that deferral will not change any other term of the loan. ‘mortgage”.
Relief is sought in the form of damages and restitution of all alleged overcharges on a mortgage loan, statutory damages for breach of TILA and an order requiring PNC to recalculate the outstanding principal balance on all the mortgages concerned and to reimburse or credit the consumers concerned.
In response to the lawsuit, PNC Bank said it “does not wish to comment.”
Since the beginning of the year, the Consumer Financial Protection Bureau made it clear that mortgage agents need to give their consumers access to home retention options in order to avoid a tidal wave of foreclosures.
The office also said it was closely monitoring how service providers engage with borrowers and how they handle loss mitigation requests.