HUNTINGTON — PHH Mortgage Corporation denied all claims in a lawsuit alleging it failed in handling a consumer's mortgage and nearly caused him to lose his home.
"At all pertinent times, PHH acted in good faith," it argues in its answer to the plaintiff's complaint. "The matters of which Plaintiff complains were the direct result of actions or inactions of Plaintiff or third parties. The matters of which Plaintiff complains were not caused by any action or inaction on the part of PHH."
PHH argues none of its actions constituted a violation of the Real Estate Settlement Procedures Act.
The defendant argued that "... any allegations of RESPA, if applicable, were unintentional or the result of a bona fide error of fact, notwithstanding the maintenance of procedures reasonably adapted to avoid any such error and, therefore, no liability can be imposed under RESPA."
In his lawsuit, Chadrick Lowther signed a note and deed of trust in September 2020 to refinance his Winfield home. PHH was the loan services beginning Sept. 1, 2021, according to a complaint filed in U.S. District Court for the Southern District of West Virginia.
PHH services sent Lowther a notice on Oct. 1, 2021, that they would be lowering his payment and that he would be refunded $2,934.97 because he had overpaid his escrow account, according to the suit.
"Escrow accounts are typically designed to collect monthly installments so that the borrower has sufficient funds to pay property taxes and insurance when they become due," the complaint states. "Mr. Lowther relied on PHH to perform its professional duties as a loan servicer and relied upon PHH’s representation that he had overpaid his escrow."
Lowther claims his mortgage payment, including monthly amounts designated for escrow funding, was always current and was never 30 days late and PHH had an obligation to pay Lowther’s property taxes out of an established escrow account that it was required to maintain.
"Thereafter, Mr. Lowther received a notice from the Sheriff of Putnam County advising that he had an unpaid tax lien on his home and that his home would be sold on November 18, 2021, unless he paid $1,658.20 in taxes and fees," the complaint states.
Lowther claims he promptly paid the past due taxes, fees and costs on Oct. 20, 2021, and then mailed a qualified written request to PHH regarding the servicing errors.
PHH then communicated with Lowther that he owed additional amounts because his monthly payments were insufficient to cover the necessary costs of the loan and escrow obligation and that he had underpaid and that additional amounts would be added to his debt payment each month to cover an escrow shortage.
"Accordingly, in a short period of time, PHH informed Mr. Lowther that he was overpaying escrow and then underpaying escrow and adjusted his payment according to its various miscalculations and did so while failing to correctly pay county taxes," the complaint states. "PHH misrepresented the amount of escrow necessary to keep the mortgage debt in good standing."
Lowther is seeking compensatory damages. He is represented by Jason E. Causey of Bordas & Bordas in Wheeling.
PHH is represented by Bruce M. Jacobs, Nicholas P. Mooney II and Alexander L. Turner of Spilman Thomas & Battle.
U.S. District Court for the Southern District of West Virginia case number: 3:22-cv-00362