On August 22, the U.S. District Court for the Western District of Washington granted summary judgment in favor of a defendant mortgage servicer in a class action lawsuit challenging fees charged for expedited delivery of payoff statements. The plaintiffs alleged such fees were illegal “pay-to-pay junk fees,” and brought claims alleging violations of the FDCPA and state debt collection and mortgage servicing laws, as well as for unjust enrichment and breach of contract.

The court found that the defendant’s practice of charging a fee for expedited delivery of payoff statements constituted an optional contracted service outside the scope of the original mortgage agreement. The court held that RESPA’s prohibition on charging for Truth-in-Lending disclosures applies only to the TILA disclosures required before the extension of credit and does not apply to post-consummation servicing requirements such as payoff statements. Additionally, the court ruled that the FDCPA and related state consumer protection laws did not bar the fees because the activity was not a communication “in connection with the collection of any debt,” but rather a fee for delivering requested information regarding the debt. As a result, the court held that the servicer could legally charge a reasonable fee for providing expedited payoff statements. Finally, the court found various Washington and Maryland state laws identified by the plaintiffs to be inapplicable to fees charged for expedited delivery of payoff statements.