Litton Loan Servicing Class Action

On October 26, 2005, customers of Litton Loan Servicing, LP ("Litton") filed a class action complaint charging the company with violations of federal and state law. The named Plaintiffs filed the class action lawsuit on behalf of a Nationwide Class and a California Subclass of Litton customers. The Nationwide Class alleged claims based on violations of the Real Estate Settlement Procedures Act ("RESPA") relating to Litton's improper actions in imposing late fees or treating payments as late during the 60-day grace period following the effective date of loan transfer if a borrower sends a payment to his or her old servicer on time. The California Subclass alleged claims based on violations of California law relating to Litton's unfair business acts and practices with respect to the servicing of loans.

The case is currently pending before Judge Margaret M. Morrow of the United States District Court for the Central District of California in Los Angeles, California. Lieff, Cabraser, Heimann & Bernstein, LLP and co-counsel represent Plaintiffs and the Nationwide Class.

Nationwide Class Certified

On July 30, 2007, Judge Morrow issued a 56-page order granting Plaintiffs' Motion for Certification of a Nationwide RESPA Class. Click here to read a copy of the Court's Order. (Note: the Order is not a determination of the merits of case.) The Nationwide Class is defined as:

All persons (i) who presently own, or during the Class Period owned, property (including mobile homes) in the United States, (ii) who entered into a mortgage loan transaction which was then transferred or sold to Litton or for which the servicing rights were acquired by Litton Loan Servicing, LP or its predecessors, directly or indirectly, at any time between October 26, 2002, and the present, and (iii) who made timely payments to the transferor servicer and were charged late fees related to that payment within the first sixty (60) days of the loan transfer to Litton.

This was a great achievement for Plaintiffs, resulting from months of hard work and a long string of briefs that were filed. By separate order, the Court denied our motion for certification of a California subclass. What this means is that the only class claims still pending are those involving late fees Litton charged within the first 60 days of loan transfer from the previous servicer where borrowers made payments to the previous servicer that Litton failed to credit.

However, on August 13, 2007, Litton filed a petition with the United States Court of Appeals for the Ninth Circuit, requesting permission to appeal Judge Morrow's order certifying the Nationwide Class. Plaintiffs filed a response with the Court of Appeals on August 27, 2007, opposing Litton's petition. If the Court of Appeals grants Litton's petition, Litton will file an appeal. If the Court of Appeals denies Litton's petition, the Nationwide Class remains in effect.

Mediation

As is typical in a case like this, the Court ordered the parties to engage in settlement talks to see if the parties could come to resolution of the case out of court. The parties had their first mediation with mediator and retired judge, Hon. Read Ambler, on July 31, 2007. Because the settlement talks are confidential, we cannot disclose any details to you. However, the settlement talks are ongoing and you will be notified if a settlement is reached.

Next Steps

Our case is currently scheduled to go to trial on November 27, 2007. Since the Court only certified our Nationwide Class, this is the only aspect of the case that can proceed as a class action. In preparation for trial, we have reviewed thousands of pages of documents, taken 12 depositions of Litton's key employees, including Litton's Senior Vice President of Default Administration and Senior Vice President of Loan Administration, and worked with experts in the fields of loan servicing and accounting. Over the next few months, we will continue to prepare our case for trial in the event that mediation proves unsuccessful.

We are working hard to achieve the best resolution possible for the class, and we appreciate your patience and continued support. In the meantime, you do not need to do anything regarding your national RESPA 60-day late fee claims. For all other claims, this case will not protect your rights and you should seek another attorney promptly.

Frequently Asked Questions

What does all of this mean? The trial court certified a Nationwide RESPA Class of borrowers as follows:

All persons (i) who presently own, or during the Class Period owned, property (including mobile homes) in the United States, (ii) who entered into a mortgage loan transaction which was then transferred or sold to Litton or for which the servicing rights were acquired by Litton Loan Servicing, LP or its predecessors, directly or indirectly, at any time between October 26, 2002, and the present, and (iii) who made timely payments to the transferor servicer and were charged late fees related to that payment within the first sixty (60) days of the loan transfer to Litton.

This means that only those borrowers who meet all of the requirements of this definition are covered by this class action, and only those claims that are described in the class definition are addressed. However, Litton has petitioned the Court of Appeals for permission to appeal the trial court's order certifying the Nationwide RESPA Class. We must wait for this issue to be resolved before we know whether the courts will allow this case to proceed as a class action on behalf of the Nationwide RESPA Class.
How do I know if I am a class member? If the Court of Appeals allows this case to proceed, Litton has the burden of identifying those borrowers who fall within the class definition (as described above). If this case proceeds as a class action on behalf of the Nationwide RESPA Class and if you are a member of that class, you will be notified in writing of what actions you will need to take to protect your rights. Until Litton identifies the class members pursuant to the Court's order, we cannot confirm whether or not you are a member of the Nationwide RESPA Class.
What if I don't meet the requirements for the Nationwide RESPA Class, as defined above? If you do NOT fall within the class definition described above, you are NOT a class member and your rights are NOT protected by this class action. We suggest that you contact another attorney promptly to protect your rights.
Can you give me a referral to an attorney? If you need a referral to another attorney for your individual claim(s), we suggest you contact your state bar association or the National Consumer Law Center at http://www.consumerlaw.org/.

Contact Lieff Cabraser

We appreciate receiving information on your experiences with Litton. Click here to contact our firm. However, Lieff Cabraser cannot serve as your counsel in any matter unless you and our firm expressly agree in writing that we serve as your attorney. Please read the Statute of Limitations Notice below.

As part of our long-standing objective of advancing consumer rights, we are spearheading litigation intended to halt alleged illegal and deceptive business practices -- often targeted at persons of low income or having poor credit histories -- by several of the nation's top credit card and mortgage loan servicing companies.

Statute of Limitations and Trademark Notice

You should be aware that the Statute of Limitations (the deadline imposed by law within which you may bring a lawsuit) may severely limit the time remaining for you to file any potential claims you may have.

Lieff Cabraser Heimann & Bernstein, LLP, is not affiliated in any way with Litton Loan Servicing LP. Please read our disclaimer.