Thomas E. Loeser
Have you had a home loan with Flagstar Bank?
Flagstar Bank may have withheld escrow interest from you, in violation of state law. You may be entitled to interest on the amounts held in your escrow account since 2011.
Fill out the form to find out your rights to potential compensation »
Hagens Berman has filed a class-action lawsuit against Flagstar Bank for its policy and practice of failing to pay interest on money it holds in mortgage escrow accounts for borrowers, robbing homeowners of their rightful funds in violation of California and other state law.
ABOUT THE LAWSUIT
The lawsuit states that Flagstar's practices are in direct violation of California Civil Code § 2954.8(a), which dictates that Flagstar and other financial institutions like it "shall pay interest on the amount so held to the borrower" when it makes loans on properties and receives money in advance for payment of taxes or assessments on the property. That law states: "The interest on such amounts shall be at the rate of at least 2 percent simple interest per annum. Such interest shall be credited to the borrower’s account annually or upon termination of such account, whichever is earlier." Other states, including New York have similar laws that Flagstar may have flouted.
The suit's plaintiff, who lives in Contra Costa County, secured a home loan. Their deed of trust provides for the lender to establish an escrow account for the payment of property taxes, insurance premiums and other potential charges related to the property.
At some point prior to 2012 Flagstar took over the servicing of the homeowners' mortgage account. During the period that it serviced the plaintiffs’ mortgage, Flagstar created an escrow account (pursuant to the deed of trust) and held their money in that escrow account, but did not pay them for interest on those funds as required by Section 2954.8(a). On July 13, 2018, the homeowners gave written notice and demanded that Flagstar correct this issue.
Under Section 2954.8(a) and under the deed of trust, the loan servicer was required to pay interest on the escrow account funds.
Our firm believes that Flagstar has been purposefully refusing to pay interest on escrow accounts to enrich itself at its customers’ expense. Our firm's investigation has found Flagstar's practices violate California laws including the Unfair Competition Law, and constitutes a breach of contract. You have a right to what Flagstar has intentionally withheld, and our firm intends to fight for payback.
TOP HOMEOWNER RIGHTS FIRM
Hagens Berman is one of the most successful litigation law firms in the U.S. and has achieved more than $260 billion in settlements for consumers in lawsuits against big banks, mortgage companies and others. Our firm has proudly stood up against Bank of America, Wells Fargo, First American Title, Countrywide and others in the fight for homeowners' rights. Your claim will be handled by attorneys experienced in consumer law.
NO COST TO YOU
There is no cost or fee whatsoever involved in joining this case. In the event Hagens Berman or any other firm obtains a settlement that provides benefits to class members, the court will decide a reasonable fee to be awarded to the class' legal team. In no case will any class member ever be asked to pay any out-of-pocket sum.
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