Consumer Financial Protection Bureau is suing a national mortgage lender claiming it falsely advertising how much it can save consumers through its program.
The bureau filed the lawsuit on May 11 in U.S. District Court
for the Northern District of California
against Nationwide Biweekly Administration. Inc., Loan Payment Administration, LLC and Daniel Lipsky, the founder and president of both companies. The suit claims National Biweekly's “interest minimizer” program doesn't save consumers the amount of money it advertises.
The suit said Nationwide Biweekly offers consumers the opportunity to make biweekly payments on their mortgages and in turn Nationwide Biweekly sends the funds to the homeowner's lender. The suit claims the company advertises that the plan will save homeowners interest almost immediately.
“In reality, consumers will not begin to save the 'monthly interest savings' amount upon enrollment,” the lawsuit said. “Rather, the 'monthly interest savings' Nationwide and LPA promise are an average over the life of the loan, assuming the consumer stays in the program until the mortgage is paid off,” the suit said.,
The bureau is seeking an unspecified amount of damages plus court costs and attorneys fees.
The attorneys for the bureau are Anthony Alexis, Deborah Morris, Michael Salemi, Melanie Hirsch and Edward Keefe in Washington, D.C.
U.S. District Court for the Northern District of California case number 3:15-cv-02106.