CHARLESTON – A man is suing Nationstar Mortgage after he claims it engaged in fraud and illegal debt collection abuses.
Anthony D. Long purchased his home in December 2007 for $65,000 and it was his first real estate purchase and first experience with mortgages and financing, according to a complaint initially filed Dec. 10 in Nicholas Circuit Court and removed to federal court on Jan. 28.
Long claims because he was and is unsophisticated in such matters, he was reliant upon the honest and truthfulness of the lenders and services with which he dealt.
Long financed the purchase and related closing expenses through an eight percent interest purchase money loan from Flagstar Bank and the principal amount of the loan was $67,000.
On Oct. 12, 2009, Nationstar represented to Long that it had acquired his mortgage loan, which was a false and misleading representation, as the mortgage company had never been the owner of the mortgage loan, according to the suit. A different notice informed him that Nationstar had become the servicer of the loan.
Long claims Nationstar represented that his total debt owed on the mortgage was $66,382.99 and, at that time, his monthly payments were $800 per month.
In December 2009, Nationwide agreed that Long qualified for a loan modification to reduce his interest to two percent for five years, with a slow climb to a maximum of 5.125 percent for all loan periods after February 2018.
Long claims Nationstar did not simply reduce the interest rate on the outstanding principal balance under the original loan, and, instead, falsely, fraudulently, unconscionably and intentionally misrepresented to Long that he owed $76,615.48, an amount more than $10,000 higher than the total debt stated just two months previously.
The fees and charges imposed on Long many times exceeded in nature and/or amount that which was permissible under the contract and/or state law, according to the suit.
Long claims because of his reasonable reliance on Nationstar's honestly, good faith and greater expertise in mortgage servicing matter, he was reasonably induced to believe he legally owed the inflated amount demanded by the company and agreed to enter a renewed loan for that inflated amount to get the reduced interest rate.
In servicing the renewed loan over the next several years, Nationstar has continued to impose late charges and fees in excess of the amounts permitted by Long's contract documents and/or state law, according to the suit.
Long claims in October, Nationstar unlawfully charged and demanded payment of $554.44 in legal fees in connection with a foreclosure proceeding halted by his timely payment of the amount demanded for cure.
Nationstar routinely held all or portions of some of Long's payments in a suspense account for varying periods instead of crediting those payments to the amount allegedly owed at the time of receipt and, on multiple occasions, rejected and returned payments made by Long, according to the suit.
Long claims as a result, he suffered actual damages, including anxiety, mental distress and out-of-pocket loss.
Long is seeking compensatory damages. He is being represented by Gary M. Smith of Mountain State Justice.
U.S. District Court for the Southern District of West Virginia case number: 2:15-cv-01202