LOS ANGELES (CN) - Four federal class actions claim that mortgage companies charge hundreds of dollars in late fees on mortgage payments that are made on time. California law requires mortgage lenders to apply payments to the most recent installment due, but the defendants apply them to an old missed payment, allowing them to charge late fees every month, in violation of law, according to the complaints.
The similar class actions were filed against Saxon Mortgage Services, GMAC Mortgage, Litton Loan Servicing and Aurora Loan Services.
The defendants charged from $168 to $248 in monthly late fees, according to the complaint.
The lenders are accused of applying payments for a current bill to past-due bills from a prior month or months. This allows the companies to charge continuous late fees instead of assessing one late fee for each overdue payment.
The classes seek compensatory and punitive damages, disgorgement, costs and an injunction, alleging breach of contract, unjust enrichment and unfair business practices.
Plaintiffs in all four cases are represented by Richard Kellner.
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