Culver’s Clash with PHH Mortgage Ends in Private Settlement When Judge Sides with Culver

PHH MORTGAGE CORPORATION IS DEFINITELY A DEBT COLLECTOR SAY FL. FEDERAL JUDGE

DEC 16, 2020 | REPUBLISHED BY LIT: JUL 20, 2021

A mortgage holder with a defaulted home loan has settled a potential class action lawsuit with PHH Mortgage Corp. after he alleged that the company inflated property inspection fees.

Kirk Culver sued the company in 2020 and said in a proposed class action lawsuit that PHH improperly charged him markups on its costs for third-party property inspections for defaulted loans, Law360 reports.

According to the claim, PHH contracted with a third-party vendor that used a computerized system to generated property inspections every 20 to 30 days, and with each inspection, PHH added between $15 to $19.50 to Culver’s mortgage.

However, the actual cost of the inspections were “much less than what was charged to plaintiff,” the class action lawsuit said.

Although Culver sought to represent other mortgage borrowers who had allegedly been through the same thing, his counsel told Law360 that after discovery they found “that the claims were not ripe for class certification.”

“We, therefore, turned our attention to resolving our individual client’s claim and damages, and we are very pleased that we were able to do so,”

Zachary Ludens of Zebersky Payne Shaw Lewenz LLP said.

Ludens said that deal spelt the end of the Class claims in terms of Culver being the Class Representative.

In June, PHH tried to get the case tossed out, but U.S. District Judge Paul G. Byron ruled in Culver’s favor and allowed his claims of breach of contract and violations to the Fair Debt Collection Practices Act, as well as allegations of violations of the Florida Consumer Collection Practices Act.

PHH said in its motion for dismissal that it did not qualify as a debt collector and shouldn’t be subjected to the laws Culver was suing under.

However, Judge Byron cited PHH’s statements that include an amount due, a $72.22 late fee that “may be charged,” and a clear statement saying that the letter is from a “debt collector attempting to collect a debt,” as evidence it does act as a debt collector.

“If the instant communication — which includes clear language identifying defendant as a debt collector attempting to collect a debt, a potential late fee of $72.22 and a total amount due — does not qualify as a debt collection communication, it is difficult to comprehend what would.”

Last September, PHH reached a $12.6 million class action settlement with homeowners who alleged that the company’s practice of charging what it referred to as “processing fees” when customers made their home loan payments online or over the telephone — fees ranging from $17.50 to $7.50 — violated the Federal Fair Debt Collection Practices Act and were in breach of their mortgage contracts.

Culver is represented by Jordan A. Shaw and Zachary D. Ludens of Zebersky Payne Shaw Lewenz LLP, J. Matthew Stephens of Methvin Terrell Yancey Stephens & Miller PC and Darren R. Newhart of Newhart Legal PA.

PHH is represented by Dale A. Evans Jr. of Locke Lord LLP.

The PHH Inspection Fee Class Action Lawsuit is Culver v. PHH Mortgage Corp., Case No. 6:20-cv-02292, in the U.S. District Court for the Middle District of Florida.