Bailey Glasser Wins Appeal Benefiting Thousands of Maryland Mortgage Borrowers

Bailey Glasser partner James L. Kauffman obtained an appellate court victory that will help protect thousands of Maryland homeowners in a lawsuit challenging “Pay-to-Pay” fees - extra amounts of up to $20 that a mortgage servicer charges for simply processing a monthly payment by phone or internet. The lawsuit, Alexander, et al. v. Carrington Mortgage Services, LLC, alleges that the fees violate Federal and Maryland debt collection law.

Bailey Glasser’s clients originally brought this case as a class action against Carrington Mortgage Services, LLC, alleging that charging “convenience fees” to borrowers who paid monthly mortgage bills online or over the phone was not permitted by law. The lower district court dismissed the plaintiff’s claims, finding that Carrington had the “right” to collect these additional fees.  Bailey Glasser appealed this ruling on behalf of all our consumer clients.

On January 19, 2022, the Fourth Circuit Court of Appeals reversed the lower court’s dismissal of the plaintiffs’ claims, holding that, in fact, Plaintiffs Alexander and Bishop may pursue their challenge that Pay-to-Pay fees violated Federal and Maryland debt collection law.  The Fourth Circuit Court opinion set precedent that will protect thousands of Maryland consumers from these types of illegal fees. The matter now will return to the district court for further litigation.

“This case sets an important precedent because it reads the law as it was intended – to protect the consumer” said Bailey Glasser partner James Kauffman.  “These kinds of fees are unlawful, and we will continue to fight across the country to protect consumers from companies taking advantage of them.”

The opinion is Alexander, et al. v. Carrington Mortgage Services, LLC, Case No. 20-2359 (4th Cir. Jan. 19, 2022).