Consumer Protection – Consumer sues mortgage and loan provider companies

Where a consumer plausibly alleged claims under the Fair Debt Collection Practices Act and Real Estate Settlement Practices Act against a mortgage company and loan provider, their motion to dismiss was largely denied.

Background

Donnie Rainey II sued Amerihome Mortgage Co. LLC and Cenlar FSB, asserting claims for: (1) violation of the Fair Debt Collection Practices Act, or FDCPA, against Cenlar; (2) violation of the Real Estate Settlement Procedures Act § 2605(e), or RESPA, against all defendants and (3) violation of RESPA § 2605(k) against all defendants. Defendants have filed a motion to dismiss.

FDCPA

Plaintiff has sufficiently alleged a claim under 15 U.S.C. §§ 1692e(2) and (10) because the facts alleged support the allegations that Cenlar falsely represented “the character, amount, or legal status” of his monthly mortgage payment and utilized “false representation or deceptive means to collect or attempt to collect any debt.”

Cenlar misled plaintiff by omitting the fact that they would not conduct an escrow analysis to remove his escrow shortage and lower his monthly payment after the execution of the partial claim, until the end of the computation year. And the approval letter that Cenlar sent to plaintiff suggested that he would not be charged for the satisfied escrow shortage because the estimated payment amount did not include the additional charge for the previously owed escrow shortage amount and indicated that the estimate would be subject to change after an escrow analysis.

In the last two months of the escrow analysis computation year, Cenlar lowered plaintiff’s monthly mortgage payment to $1,568.18 and sent plaintiff a letter stating that there had been “a delay in adjusting the payment amount to reflect the partial claim agreed upon amount of $1,586.82 until June 2024.” Such conduct suggests that Cenlar was aware that plaintiff had been charged the incorrect amount and falsely represented the amount and or utilized false representation to collect plaintiff’s mortgage payment.

It is under this same rationale that plaintiff plausibly alleges a violation of 15 U.S.C. §§ 1692e(2)(A), (8) and (10) by communicating to one or more consumer reporting agencies that his mortgage was in foreclosure. Since plaintiff has plausibly alleged that Cenlar made false or misleading statements about the amount that plaintiff owed in his monthly statements, and misapplied his March 2024 payment, any foreclosure status that has occurred based on these false or misleading statements is also a misrepresentation of the amount owed and foreclosure status of his account.

To the extent that the late fees and/or corporate advance fees are derived from the misleading monthly mortgage statement and misapplied March 2024 payment, the fees charged are also a false representation of the amount owed. Plaintiff also plausibly alleges that threatening to report plaintiff as delinquent on his payments constitutes a false representation of the legal status of his debt and a false representation used to attempt to collect a debt.

Therefore, the court finds that plaintiff fails to state a claim under § 1692f because the claim is based on the same alleged misconduct undergirding his § 1692e claim. Plaintiff argues that Cenlar violated 15 U.S.C. § 1692e(10) by falsely representing to plaintiff that they would remove derogatory credit reporting. The court agrees.

Plaintiff also argues that Cenlar violated 15 U.S.C. §§ 1692e(2)(A) and (10) by falsely representing to plaintiff that his mortgage payment had increased because of a recent escrow analysis. Plaintiff alleges that this statement was a false representation because at the time of the statement, Cenlar had not conducted an escrow analysis for 10 months. However, the court finds that the defendant’s statement referencing a recent escrow analysis is too subjective to support an FDCPA violation.

Plaintiff’s § 1692f claim alleging that defendant misapplied a payment to create a default on his mortgage is premised on the same conduct already covered by plaintiff’s §1692e claim. Therefore, this portion of plaintiff’s claim is dismissed. With respect to plaintiff’s remaining claims under § 1692f, plaintiff fails to plausibly allege that Cenlar used “unfair or unconscionable means to collect a debt” by wrongfully returning payments and failing to accept payments.

RESPA § 2605(e)

Plaintiff sent qualified written request letters to defendants on May 20 and July 17, 2024, addressing servicing errors such as failure to accept payments, failure to properly and timely apply plaintiff’s payments, wrongful imposition of late fees and charges and failing to provide periodic statements as required by 12 C.F.R. § 1026.41(d)(1). The court finds that plaintiff has pleaded sufficient facts to state a claim under RESPA.

RESPA § 2605(k)

Plaintiff plausibly alleged that defendants failed to conduct a reasonable investigation into the misapplication of the March 2024 mortgage payment delayed application of the partial claim, and failed to make the appropriate corrections by returning his account to good standing and crediting any late charge or penalties to plaintiff.

Defendants’ motion to dismiss granted in part, denied in part.

Rainey II v. Amerihome Mortgage Co., LLC, Case No. 2:25-cv-315, June 10, 2026. EDVA at Norfolk (Jackson). VLW 026-3-254. 30 pp.

Full-Text Opinion
VLW 026-3-254