We came across this 2011 case
in the MSFraud article archives and noticed the story no
longer appears in Military News. We did some research and
located the following articles, one attorney's summation
of the case, and some of the case documents. - MSFraud.org
Jury Awards Homeowner $21 Million In Mortgage Lawsuit
A federal jury has awarded a Georgia man more than $21 million in a lawsuit pitting the homeowner against one of the nation's largest mortgage servicers.
U.S. Army sergeant David Brash was awarded the damages in March, after a Columbus, Ga. jury found that
PHH Mortgage, the country's eighth largest mortgage servicer, had incorrectly reported Brash to credit score companies as "seriously delinquent" despite the fact that all his mortgage payments had been automatically deducted from his paycheck.
According to court documents, Brash sent letters to the mortgage company that went unanswered, violating federal laws. When he called his mortgage company to find out why his payments were not going through, his attorneys said, he was repeatedly routed to overseas customer services staff who couldn't answer his questions.
"PHH's corporate representative testified that call center representatives had limited access to information," Teresa Abell, one of Brash's attorneys told The Huffington Post. Some of Brash's calls -- which were automatically recorded by PHH -- were played in court, Abell explained. "The jury got a flavor of what would happen, he could be put on hold for 30, 45 or 55 minutes, then representatives would give him whatever story they had concocted," she added. Different representatives told Brash different things, many of which were simply not true, Abell alleged. "They would tell him they would investigate and get back to him in 24 hours, he'd call back, and another representative would tell him "there is no investigation being done on your account.""
Consumer websites are packed with homeowner complaints of mistakes by mortgage companies and banks that can be impossible to set right -- in part thanks to unhelpful customer service departments. In the most extreme cases, these problems may have led to wrongful foreclosures. In January, JPMorgan Chase admitted to overcharging military families on their mortgages, illegally foreclosing on 14 families as a result. In February, The Huffington Post reported on a couple who were facing foreclosure despite having proof they had made every mortgage payment. In circumstances echoing Brash's, PHH Mortgage reported that homeowner, Kendra Parker, to credit rating agencies for missing payments, destroying her credit rating.
An investigation by all 50 state attorneys general launched last fall when improper paperwork practices at banks and mortgage companies -- like the "robo-signing" scandal -- came to light found many banks and mortgage servicers violated numerous state laws in handling mortgages and foreclosures. While banks expect penalties, it is unclear whether homeowners affected by their banks' actions will have any recourse.
Brash's case remains one of a few in which homeowners have successfully established that their mortgage company was in the wrong, but lawyers say more are on the horizon.
Brash originally took out the $160,000 mortgage on his Columbus, Ga., home in November 2007, setting up automatic payments so his $1,300-a-month payments would be deducted from his army salary. During the trial, the jury heard the homeowner called the mortgage company twice to make sure the paperwork was correct. In court, representatives for PHH Mortgage testified that mistakes on these forms -- which customer service staff had told Brash were correct -- had caused the missing and late payments.
After 15 months, according to court documents, PHH Mortgage started sending late payment notices to Brash, and threatened to report his "serious delinquency" to credit scoring agencies. After "numerous, lengthy calls" to a customer service department in India went nowhere, Brash hired an attorney who wrote a formal letter to the president of PHH about the errors. Under the federal Real Estate Settlement and Procedures Act, mortgage companies and banks have to respond to written requests within 60 business days, which PHH failed to do, the attorneys said. They did however adjust Brash's account.
In November 2009 PHH Mortgage sent more late payment notices, this time reporting Brash to three credit rating companies and seriously damaging his credit score, according to court documents. Brash, based in Fort Benning, Ga., sued the mortgage company for breaching the federal Real Estate Settlement and Procedures Act. He also sued under Georgia state loan servicing and breach of contract laws.
Attorneys representing PHH Mortgage did not return calls for comment, but told Georgia TV news station WTVM: "Although we respect the judicial process, we believe this verdict is not supported by the facts of the case or by applicable law, and that the award is grossly disproportionate to any damages Sgt. Brash may have sustained. We intend to seek further judicial review of the case."
The Columbus-based Ledger-Enquirer originally reported Brash's
story, but it is no longer available. This story
also appeared in Military News, but it was taken down.
Georgia jury sends $21 million message to sloppy mortgage loan servicer
4/5/2011 | Law Offices of David C. Winton
On March 21, 2011, a Columbus, Georgia jury sent a very loud message to loan servicers in the form of a $21 million verdict and punitive damage award against PHH Mortgage, an affiliate of Coldwell Banker Mortgage.
David Brash, a sergeant in the United States Army, bought a home in 2007, and obtained a $161,000 mortgage loan from Coldwell Banker Mortgage. The loan was serviced by PHH Mortgage. Sergeant Brash had his monthly payments set on autopay out of his US Army paycheck. (In fact, Sgt. Brash overpaid each month.) Things went along swimmingly for about a year and a half, until PHH began losing track of the payments, which then triggered the phone calls and letters telling him that he was delinquent. A mortgage lender losing track of payments and blaming the consumer? Say it ain’t so.
Anyhow, that started a series of very patient efforts by Sgt. Brash to resolve the issue, all of which are thoroughly described in the Complaint. The servicer’s call center was outsourced to India. (No comment on that. I very seriously doubt that Sgt. Brash would have received better treatment from his fellow countrymen.) But in an amusing instance of what’s-good-for-the-goose-is-good-for-the-gander, Sgt. Brash actually recorded the phone calls with the servicer (for quality assurance purposes right?), and the tapes of the phone calls were played to the jury. Transcripts of the calls were also admitted into evidence. I pulled the actual transcript of the phone calls from the Court’s docket, and you can review it for a good example of how to handle your own such calls. Very good evidentiary material that.
The upshot of the story? After multiple attempts to sort things out, PHH assured Sgt. Brash that things were resolved, and that the erroneously designated “late” payments had been properly credited. But then what did they do? You guessed it. They reported the false delinquencies to the Credit Cops, Equifax, TransUnion and Experian. This, in turn, caused Sgt. Brash to be denied credit. As stated in the Complaint, “Coldwell Banker Mortgage has refused to answer Plaintiff’s legitimate inquiries, and has refused to correct and straighten out Plaintiff’s account.” (See Complaint, ¶48.)
Other than the obvious appeal of David taking on and beating up on Goliath–the sheer joy of seeing an abusive loan servicer get hit–the other appeal of this case is how meticulously Sgt. Brash documents his odyssey through this experience. If you’re having trouble with your bank or loan servicer, read the Complaint that Charles Gower (Sgt. Brash’s lawyer) drafted, and review the list of trial exhibits. They are a roadmap for how to build and maintain a paper trail and document abusive loan servicer practices. This is the kind of evidence that wins lawsuits.
For lawyers who are keeping track, it appears that the gravamen of the legal theory was a violation of §2605 of RESPA. (12 USC §2605.)
David beats Goliath:
Homeowner wins $21 MILLION payout from mortgage firm in dispute over credit rating
a rare case of the little guy taking on a big corporation - and
Army sergeant David Brash has won more than $21million in damages from
PHH Mortgage after it falsely claimed he defaulted on his loan.
29-year-old was awarded the enormous sum by a Columbus jury after he
sued the mortgage company - the country's eight-biggest - for
reporting him as 'seriously delinquent' to credit rating companies.
David Brash was awarded $21million in damages against
PHH after it claimed he defaulted on his mortgage
this house in Columbus, Georgia.
claimed he was behind on his mortgage payments, when in fact they had
been automatically deducted out of his Army pay cheque every month.
set up a direct debit in 2007 when he bought the house, in Columbus,
Georgia, so he wouldn't miss any of his installments while he was on
active duty at Fort Benning.
Gower, one of his lawyers, told WTVM: 'This soldier was never behind
on his payments. They were taking his money and not crediting it
think the jury and everybody has had this experience before with the
call centre and they're fed up with it.'
said the verdict sent an important message to the 'billion-dollar'
company - and it needed to pay more attention to its customers.
sergeant, who is married with a baby on the way, had no problems with
his $160,000 mortgage until September 2009, when he began to get late
notices in the post.
PHH, the eighth-largest mortgage company in America,
has been ordered to give David Brash $21 million in damages.
called PHH repeatedly to find out what was going on, but each time he
was put through to an outsourced customer service centre in India,
where staff couldn't answer his questions.
the late notices continued, PHH threatened to report his 'serious
delinquency' to credit scoring agencies - and each time Sergeant Brash
called, he still couldn't get anywhere.
of the frustrating calls, automatically recorded by PHH, were played
out in court.
Abell, one of his lawyers, told the Huffington Post: 'The jury got a
flavour of what would happen, he could be put on hold for 30, 45 or 55
minutes, then representatives would give him whatever story they had
would tell him they would investigate and get back to him in 24 hours,
he'd call back, and another representative would tell him "there
is no investigation being done on your account".'
Sergeant Brash took action, and went to an attorney who wrote a formal
letter to the company's president.
to court documents, the company failed to respond within 60 days, even
though mortgage companies and banks are legally obliged to answer
written requests within that time.
Frustration: U.S. Army sergeant
David Brash set up automatic payments while he was on active
duty at Fort Benning, Georgia - but PHH claimed he had
firm did at least adjust his account - and Sergeant Brash thought it
was at last resolved.
then in November 2009, the late notices began again. The firm reported
him to three credit rating companies, seriously damaging his credit
credit card applications were turned down and he began to worry the
situation would affect his career in the army - so he decided to sue,
under Georgia law and the federal Real Estate Settlement and
a six-day trial in March, a jury awarded Sergeant Brash $21,350,575,
including $20million in punitive damages.
company claimed the confusion arose because of mistakes made on
Sergeant Brash's original paperwork - even though he rang twice to
check and staff told him everything was correct.
Gower told WTVM: 'The jury has spoken on the verdict. I think it was
important for them to send a message to this billion dollar company.
they given a dollar verdict it wouldn't have sent the message but I
promise you, I think we got their attention now.
mortgage companies need to pay more attention to their customers and
not just send them to some out of country call centre. They need to
take their calls and get this thing straightened out.'
to court documents, PHH services approximately one million mortgages,
valued at $163billion.
McGrain, a spokesman for PHH, told MailOnline: 'PHH Mortgage is
recognised as one of the nation’s leading mortgage servicers, and we
take our responsibilities to borrowers seriously.
we respect the judicial process, we believe this verdict is not
supported by the facts of the case or by applicable law, and that the
award is grossly disproportionate to any damages Sgt. Brash may have
intend to seek further judicial review of the case.'
v. PHH Motion to Exclude Evidence DENIED
v. PHH Jury Verdict
v. PHH Judgment
v. PHH Summation
v. PHH Audio Recordings