A Columbus, Georgia federal jury reached a verdict against PHH Mortgage Corp which does business as Coldwell Banker Mortgage. The jury awarded Staff Seargent David Brash over $21 million in damages consisting of $1 million in emotional distress damages and $20 million in punitive damages.
Brash bought a home 2007 with a mortgage loan from Coldwell Banker. His monthly mortgage payments were automatically withdrawn from his account each month with no problems. In 2009, he suddenly began receiving late notices from the mortgage company even though his payments were continually taken out of his account on time.
In something that has become all too familiar to consumers all over the country, Brash then embarked on an odessey of dealing with Coldwell Banker’s customer service department which outsourced most of its calls to India. Despite assurances by customer service representatives that the issue had been rectified, the mortgage servicer continued to treat the payments as being late.
Coldwell Banker eventually reported Brash as being late to the major credit reporting agencies. Brash alleged that he was then denied credit based on the negative reporting by his local bank.
Brash sued the mortgage servicer in a Georgia federal court for violations of the Real Estate Settlement and Procedures Act (RESPA), breach of contract and negligent loan servicing. The jury awarded him $1 million for the emotional distress that the servicer put him through, his attorneys’ fees and also ordered $20 million in punitive damages.
Brash’s lawyer told Georgia’s WTVM 9: “This soldier was never behind on his payments. They were taking his money and not crediting it properly. I think the jury and everybody has had this experience before with the call center and they’re fed up with it. They started to make his credit delinquent. They wrote him letters saying he was behind on his mortgage and it affected his credit. And by affecting his credit, he got turned down for credit cards and was worried he’d get in trouble with the Army.”
PHH Corporation issued a statement saying that it takes its responsibilities to borrowers seriously, but that it believes the verdict is not supported by the facts and that it intends to seek further judicial review of the case.
Brash’s case should be heeded as a warning to the mortgage servicing industry and for business owners in general. Business owners need to be aware that punitive damages are available in many different states where there has been intential and reckless conduct.
Attorney Andrew Garcia, your SouthCoast Business Attorney, is a principal of Phillips Garcia Law. He’s created a Business Legal Planning system that will walk you through the process of forming your Massachusetts corporation. Locally he has appeared live on WBSM-AM radio and nationally on NBC’s Today Show and Fox’s Fox & Friends program. If you are interested in learning more about his Business Legal Planning services, just contact him at firstname.lastname@example.org or by calling (508) 998-0800.