On May 6, the plaintiff in a certified class action in the U.S. District Court for the Middle District of North Carolina moved, and filed a supporting memorandum, for preliminary approval of a $9 million settlement with a mortgage loan servicer over allegations that the servicer charged borrowers fees of up to $15 to make mortgage payments by phone or through an interactive voice response (IVR) system (commonly known as “pay-to-pay” fees), even though the actual cost of processing such payments was alleged to be less than $0.50 per transaction. The complaint, filed in April 2024, alleged that the servicer violated the North Carolina Debt Collection Act, which prohibits debt collectors from collecting unauthorized fees or charges incidental to the principal debt, and the North Carolina Unfair and Deceptive Trade Practices Act, which the plaintiff claimed was violated because the servicer allegedly failed to disclose that the fees exceeded its actual processing costs and were not authorized under the mortgage agreements. The court certified the class in December 2025, comprising all persons with a residential mortgage loan securing a property in North Carolina, serviced or subserviced by the defendant, who paid a “pay-to-pay” fee by telephone or IVR system between April 10, 2020, and January 13, 2026.

Under the proposed settlement, class members would receive automatic distributions from the $9 million common fund — covering 13,427 identified transactions — without needing to submit claims, representing approximately $670 per fee paid. The settlement also requires the servicer to stop collecting the disputed fees from borrowers in North Carolina for at least five years.