Homeowners across the United States who finance their property with a mortgage may be eligible for a refund due to a recent legal settlement in a class-action lawsuit. The settlement covers instances where mortgage lenders charged homeowners excessive fees related to property inspections, appraisals, and related services.
The lawsuit took aim at mortgage lenders who allegedly charged borrowers more than the actual cost of property inspections, appraisals, and other services. Specifically, lenders required fees for services that were explicitly not permitted to be marked up in mortgage agreements. Many mortgages require homeowners to pay into escrow accounts, which are managed by lenders and used to pay for property taxes and other charges. The lawsuit alleges that lenders took advantage of this arrangement to overcharge homeowners for necessary services.
The settlement in the case totals $9.3 million and applies to approximately 38,000 homeowners who took out mortgages between 2010 and 2018. Eligible borrowers will receive a check within 60 days of the settlement's final approval by a judge, which is expected in early 2021.
The exact amount of the refund will vary depending on the borrower's individual circumstances and the amount overcharged by the lender. However, homeowners who participate in the settlement will receive a minimum refund of $40, with some receiving significantly more.
To be eligible for the refund, homeowners must have had a mortgage with one of the following lenders: SunTrust Mortgage, Navy Federal Credit Union, Wells Fargo, US Bank, Quicken Loans, New American Funding, Ditech, Caliber Home Loans, BB&T, or Fifth Third Bank. Borrowers will also need to have paid for an appraisal, inspection, or other third-party service related to their property.
Homeowners who believe they may be eligible for the settlement but have yet to receive information about it should contact their lender or loan servicer directly. If a borrower is uncertain whether they paid for any of the services covered by the settlement, they can review their mortgage statement or contact their lender.
While the settlement is a win for homeowners who were overcharged, it is also a reminder of the importance of understanding the fees and charges associated with homeownership. Mortgage agreements can be complex, making it challenging for borrowers to identify when they are being charged excessively.
To avoid similar situations in the future, homeowners should familiarize themselves with the fees and charges associated with their mortgage, as well as the terms and conditions of the loan. Borrowers are entitled to a Good Faith Estimate from the lender, which outlines the expected fees and expenses associated with the loan. Reviewing this document carefully can help borrowers identify any fees that seem excessive or out of line with industry standards.
Homeowners who are concerned about the fees associated with their mortgage should contact their lender or loan servicer to discuss their concerns. In some cases, it may be possible to negotiate fees or request waivers for specific charges.
While the refund provided by the recent settlement may be a relief for some homeowners, it is unlikely to cover all of the expenses associated with homeownership. Other costs, such as property taxes and maintenance expenses, can add up quickly and leave homeowners struggling to make ends meet.
Homeowners who are struggling to keep up with the expenses associated with homeownership may want to consider refinancing their mortgage or seeking financial assistance from government programs or non-profit organizations.
Overall, the recent settlement in the lawsuit against mortgage lenders is good news for homeowners who were overcharged for property inspections, appraisals, and other necessary services. However, the settlement also serves as a reminder of the importance of understanding the fees and charges associated with homeownership and taking steps to mitigate excessive or unfair charges.