The online payment website for Freedom Mortgage will not accept payments made after 11:00 p.m., in order to allow its cash department to process payments received that day. If a borrower attempts to pay after 11:00 p.m., an error message pops up and the borrower is required to postdate the payment to the next day.
Despite having experience with this system and the 11:00 p.m. cut-off time when they had to postdate their February 2018 mortgage payment to Freedom Mortgage, the Manoses attempted to make a mortgage payment on March 6, 2018, after 11:00 p.m. and that payment was not completed. The Manoses logged into the Freedom Mortgage website again on March 7th and also March 16th, but never completed the payment. Freedom Mortgage sent the Manoses their periodic monthly statement on March 19th, showing that no payment had been received and made seventeen attempts to contact the Manoses by telephone about the missed payment before the end of March. The Manoses did not actually make the payment until April 5, 2018.
Freedom Mortgage reported the mortgage 30 days delinquent, which when the Manoses were attempting to purchase a new home just a month later in May 2018, impacted their ability to obtain a new mortgage. Mrs. Manos contacted Freedom Mortgage to ask that the negative report be removed, but Freedom Mortgage declined. The Manoses then filed a dispute with the CFPB and also with the three major credit bureaus. Freedom responded to all dispute, asserting the accuracy of the delinquency report. The Manoses then brought suit alleging violations of the Fair Credit Reporting Act (FCRA) and North Carolina Debt Collection Act (NCDCA) and Unfair and Deceptive Trade Practices Act (NCUDTPA).
The district court rejected all of these claims, finding that Freedom Mortgage had conducted reasonable investigations of the disputes as required by FCRA, with the accuracy of the reported delinquency supporting the the reasonableness of the investigation. Nor was the assessment of a late fee was not unfair as required under the NCDCA and NCUDTPA, since the March payment was actually late.
For a copy of the opinion, please click here: