Class Action Lawsuit Alleges PNC Bank Knowingly Violated Fannie Mae COVID-19 Payment Deferral Agreement

A lawsuit in Maryland is alleging PNC Bank breached Fannie Mae’s COVID-19 payment deferral agreement. The lawsuit states that PNC Bank continued to charge homeowners for past-due monthly principal and interest payments after they opted for the Covid-19 deferral program.

The plaintiffs allege that PNC double-charged borrowers for their past-due principal payments. Thus, improperly increased the amount of their mortgages.

Paintiffs also allege they paid the deferred amounts and then were double-charged the amount PNC agreed to defer.

Fannie Mae, Freddie Mac and FHA offered the COVID-19 home retention option. It brings a borrower’s mortgage current. It also delays repayment of certain monthly principal and interest payments until the end of the loan period. The missed payments get deferred to the end of a loan term or earlier if the home is sold or refinanced.

Plaintiffs allege PNC violated Regulation Z of TILA. Regulation Z requires a creditor to provide periodic mortgage statements disclosing the amount of the outstanding principal balance.

Additionally, the lawsuit claims that PNC’s practices violated the Maryland Consumer Protection Act (MCPA). The MCPA prohibits unfair and deceptive trade practices in the extension of consumer credit and/or collection of consumer debts.

Plaintiffs accuse the bank of:

“Misrepresenting that its deferral agreements would only delay or defer the payment of the past-due amounts and that the payment deferral will not change any other term of the mortgage.”

Plaintiffs are seeking damages and restitution of all alleged overcharges on a mortgage loan. They are also seeking statutory damages for violations of TILA. In addition, they want an order requiring PNC to recalculate the outstanding principal balance on all affected mortgage loans. Thus, refunding or credit affected consumers.

The CFPB has made it clear that mortgage servicers must give their consumers access to home retention options.

Also, check out:

The Biden American Rescue Plan: What It Means For Housing