RWL has filed a national class action against PNC Bank for wrongly charging certain mortgage holders by over charging them after agreeing to deferred principal payments during COVID. For more information contact Chuck Fax ([email protected]) or Liesel Schopler ([email protected]).
Mortgage Holders Say PNC Inflated Principals During COVID
Law360 (October 6, 2021, 5:49 PM EDT) — PNC Bank has been “taking advantage” of homeowners who couldn’t keep up with paying off their mortgages during the coronavirus pandemic by double-charging them for deferred principal payments, a proposed nationwide class claimed in Maryland federal court.
Lead plaintiffs Robert Roy Akins and Rachael Latini, a married couple from Idlewylde, Maryland, accused the bank Tuesday of botching its COVID-19 deferral agreements, which provided homeowners extra time to make certain principal and interest payments during the pandemic’s economic upheaval.
According to Akins and Latini, Pittsburgh, Pennsylvania-headquartered PNC agreed to “pause” their mortgage payments for eight months starting in September 2020. Then, this spring, the bank deferred those payments to the end of the mortgage.
But in doing so, the complaint alleges, PNC tacked all the deferred payments onto the couple’s outstanding principal balance, effectively double-charging them for the unpaid principal and increasing the size of their mortgage.
This is not the way principal is supposed to function, the plaintiffs said, using the example of a $100,000 loan that must be repaid in monthly $10,000 installments.
“When a customer misses a monthly payment, it does not increase the outstanding principal by the unpaid principal amount,” the complaint said. “The principal remains the same.”
Yet, what PNC has allegedly done is “the equivalent of improperly adding the $10,000 missed-payment to the outstanding principal balance and increasing the mortgage loan to $110,000.”
Akins and Latini’s proposed class includes U.S. homeowners who saw their total deferred payment tacked onto their outstanding principal balance on a PNC mortgage loan.
Two subclasses would cover those who have already paid off their mortgages and Maryland homeowners covered by the Maryland Consumer Protection Act, respectively.
PNC should recalculate the outstanding balance on all affected mortgages, the proposed class said, and issue refunds for any overcharges.
Borrowers may be owed additional refunds, according to the complaint, if, like Akins and Latini, they completed their deferred payments early — resulting in a double-charge on interest as well as the principal.
PNC should also pay damages for providing mortgage holders with “inaccurate and inflated” outstanding principal balances in violation of the federal Truth in Lending Act, according to the complaint.
Akins and Latini ultimately decided to switch banks in August, the complaint said, telling PNC by email that it “must have calculated the outstanding principal balance in error.”
But PNC failed to investigate the alleged error in violation of the federal Real Estate Settlement Procedures Act, the complaint alleges, for which it should pay additional damages.
PNC declined to comment Wednesday, as did counsel for the proposed class.
The proposed class is represented by Charles S. Fax, Liesel J. Schopler and Stephen Kuperberg of Rifkin Weiner Livingston LLC, and Jason M. Frank, Scott H. Sims and Andrew D. Stolper of Frank Sims & Stolper LLP.
Counsel information for PNC Bank was not immediately available.
The case is Akins et al. v. PNC Bank NA, case number 1:21-cv-02558, in the U.S. District Court for the Northern District of Maryland.
–Editing by Adam LoBelia.