The Mortgage Controls: Mortgagors’ Dispute Regarding Alleged “Excessive” and “Unreasonable” Property Inspection Fees Fails to State a Claim Under FDCPA

In a recent decision, a federal court in the Southern District of New York (SDNY) dismissed a putative class action complaint alleging, among other things, that a mortgage servicer violated the Fair Debt Collection Practices Act (FDCPA) by charging improper property inspection fees after the mortgagors defaulted on their mortgage loans. The plaintiffs claimed that the charges were “excessive,” “[un]reasonable,” and “[in]appropriate,” and alleged that they were frequently assessed when property inspections had not been conducted. Thus, the plaintiffs argued that the servicer “knowingly misrepresented” the charges as “lawful,” “reasonable,” “legitimate,” and “proper,” when it “knew that the inspections were not necessary to maintain or protect the properties.”