Unfortunately, our office has had to pursue legal action against Freedom Mortgage yet again for violating the rights of deployed reserve servicemembers pursuant to California Military and Veteran’s Code § 800.
A copy of the Amended Complaint can be viewed by clicking here.
This lawsuit alleges that, despite the fact that the Reserve servicemember submitted all necessary documents to support his family’s request for deferment of principal and interest payments for up to 180 days during deployment, Freedom Mortgage completely ignored the request under C.M.V.C. § 800 and instead only implemented federal SCRA protections (which do not give the benefit of deferment that C.M.V.C. § 800 provides) and failed to provide any written response to the request for deferment under C.M.V.C. § 800.
The lawsuit further alleges that the servicemember tried communicating with Freedom Mortgage multiple times to notify them that his request was for deferment under C.M.V.C. 800 and his full monthly payments should not be showing as due, but Freedom Mortgage tricked him into going into default under the false assertion that the only way his account could be evaluated for any deferment would require him to first stop making his monthly payments entirely.
The lawsuit further alleges that, after going into default and suffering negative credit reporting and threats of foreclosure, the servicemember realized that this was a trick and was then forced to make a significant lump sum payment in order to bring the account current, but which never fixed the negative credit reporting that had already been submitted.
To be clear, this unfortunate scenario should have never happened. Even though Freedom Mortgage ignored the fact that (during multiple conversations) the servicemember made it clear his request was for deferment under C.M.V.C. § 800, Section 813 mandates automatic entitlement to the deferment protections due to Freedom Mortgage’s failure to provide any written response within 30 days of the initial request.
There was simply no reason for a major player in the mortgage servicing industry such as Freedom Mortgage to ignore the fact that the request was for deferment under C.M.V.C. § 800 and instead only implemented federal SCRA protections, and to then add insult to injury by tricking the servicemember into going into default under the false assertion that the only way his account could be evaluated for deferment was to stop making his monthly payments entirely.
Especially considering the fact that Freedom Mortgage has been the subject of previous lawsuits alleging violations of the California Military and Veteran’s Code, this appears to be despicable conduct deserving of exemplary damages to deter future violations.
Simply put, if a company refuses to follow California law, then that company should not conduct business in an attempt to make monetary gain in California.