Federal Court Certifies Two Nationwide Classes Against The Money Store

Federal Court Certifies Two Nationwide Classes Against The Money Store For Alleged Mortgage Servicing Misconduct

New York (I-Newswire) December 31, 2012 - Judge John G. Koeltl of the United States District Court for the Southern District of New York, on December 20, 2012, certified two nationwide classes brought on behalf of borrowers whose loans were owned or serviced by The Money Store, HomEq Servicing Corporation and related companies (the “HomEq Defendants”). The class action against the HomEq Defendants seeks damages for allegedly collecting improper fees, including fees charged by the HomEq Defendants and their third-party servicer, Fidelity National Default Solutions (“Fidelity”), a division of Fidelity National Financial, Inc. during the period of March 2000 to present.

The Court certified a nationwide class which seeks damages on behalf of all borrowers who were assessed fees by Fidelity, a non-lawyer entity, out of the attorneys’ fees collected by the HomEq Defendants. Borrowers were not advised that Fidelity’s fees had been included within the attorneys’ fees charges. The class action lawsuit contends that the arrangement between the HomEq Defendants, Fidelity and the law firms violated state ethics laws prohibiting the splitting of fees between lawyers and non-lawyers.

The ruling paves the way for borrowers to both recover damages for the improper mortgage practices as well as addresses certain abuses that have threatened the integrity of the legal system throughout the mortgage foreclosure crisis.

The District Court also certified a second nationwide class against the HomEq Defendants. This class consists of every borrower who was charged late fees on purported monthly payment obligations despite the borrower’s loan having been accelerated and declared due in its entirety after a default. Plaintiff alleges that the post-acceleration late fees violated the form loan agreements utilized and/or serviced by the HomEq Defendants.

Wells Fargo Bank, N.A. (“Wells Fargo”) holds itself out as the successor-in-interest to the HomEq Defendants. Earlier this year, Wells Fargo was one of five banking institutions that entered into a multi-state and federal agency settlement arising out of the robo-signing and foreclosure/bankruptcy fee scandal in the mortgage servicing industry.

The Law Office of Paul S. Grobman and the law firm of Sharma & DeYoung, LLP are co-counsel to the Plaintiff in this class action. For more information, please contact Paul S. Grobman at (212) 983-5880, or Neal A. DeYoung at (212) 856-7236.