AARP Has Joined The Lawsuit Against Reverse Mortgage Giants CeLink And Reverse Mortgage Funding (RMF) Over Illegal Fees

The AARP Foundation has joined a proposed class action lawsuit against Celink and RMF. The two companies are the two prominent players in the reverse mortgage industry. 

The lawsuit alleges that these companies added unlawful loan servicing fees to the mortgages. These fees violate reverse mortgage contracts. They also violate federal and state laws designed to protect older homeowners.

Tusa P.C. and Giskan, Solotaroff, & Anderson, LLP filed the lawsuit in the eastern District of New York. The main plaintiffs are Sheila Dancy-Wilkins and her 93-year-old mother, Flora Mayweathers.

Reverse mortgages provide a financial lifeline for older homeowners. It allows them to convert a portion of their home equity into cash without the need to  make monthly mortgage payments.

However, the lawsuit alleges that RMF acquired the plaintiffs’ loan. They then enlisted the services of Celink. Both companies imposed unlawful fees for appraisals and inspections. In addition to added fees to property preservation and attorneys’ costs.

CeLink Wants The Case Tossed

Court documents show Celink’s attorney say the case must be dismissed. They allege Celink is merely a subservicer of the loans on behalf of RMF.

RMF is in bankruptcy. Therefore, they have not filed an appearance in the case or responded to the allegations. 

Celink alleges Mayweathers failed to pay her property taxes in 2017. As a result, RMF commenced foreclosure proceedings. 

However, plaintiffs allege Celink and RMF failed to provide the required notices before commencing foreclosure proceedings.

The New York court dismissed the foreclosure lawsuit. However, the allegedly unlawful fees had already been added to the plaintiffs’ reverse mortgage loan balance.

The complaint further asserts that the companies continue to charge excessive interest and fees.

Federal and state regulations mandate that servicers of HECM loans provide detailed written notices to borrowers before initiating a foreclosure.

Celink argues that it’s responsibilities are not the same as RMF. They also argue that the two defendants should not be lumped together as part of the class. 

The plaintiffs seek to put an end to the practice of adding unlawful and unreasonable fees and costs to the reverse mortgage. They also aim to remove the unlawful and inflated fees, interest, and insurance charges from the loan balances.