LOS ANGELES (Legal Newsline) - A mortgage modification company is being sued for allegedly failing to tell borrowers about the cost of a balloon payment they would owe at the end of the term of the loan.
Dana D. Moody filed the lawsuit on July 9 in U.S. District Court in California against Ocwen Loan Servicing, a mortgage modification company in California.
The lawsuit claims borrowers who agree to “in-house” loan modification agreements with Ocwen also agree to a “balloon disclosure” provision. The provision doesn't list the amount of the balloon payment the borrowers will owe at the end of the loan, however, it often exceeds $100,000, the lawsuit said.
“Ocwen has duped thousands of unsuspecting homeowners into accepting loan modification agreements that contain financial black hole balloon payment provisions,” the lawsuit said.
The lawsuit said Ocwen enters into the agreements with homeowners that are already struggling financially.
“These substantial balloon payments would require most borrowers to obtain a new mortgage loan to satisfy the balloon payment when it comes due, despite making monthly payments for more than 20 years,” the lawsuit said.
Moody is seeking class status for those who obtained a modification agreement with Ocwen. She is also seeking more than $5 million in damages plus court costs.
Moody is represented by Robert Ahdoot, Tina Wolfson, and Meredith S. Lierz of Ahdoot & Wolfson, PC in West Hollywood and Eric Lectzin and Todd S. Collins of Berger & Montague, P.C. in Philadelphia.
U.S. District Court for the Central District of California case number 2:15-cv-05186.