NATURE OF COMPLAINT
Kapsis is the homeowner whose home-secured mortgage loans are serviced by (AHMSI)

On behalf of him and others similarly situated homeowners residing in New York and throughout the United States seek an investigation of AHMSI’s violations of federal and state law in connection with its improper servicing of mortgage loans.

American Home Mortgage Servicing, Inc. (“AHMSI”) is a Delaware corporation with its principal offices in Dallas County, Texas. AHMSI does business throughout the United States.

FACTUAL ALLEGATIONS
1. AHMSI services residential mortgage loans. According to its website, “AHMSI is one of the country’s largest servicers of Alt-A and subprime loans.” As described on its website, AHMSI claims that it provides “a higher level of mortgage services” and “a higher level of customer satisfaction” through the use of “highly trained experts.”

2. Contrary to its representations, when AHMSI services loans, it routinely breaches the loan agreements by, among other things, misapplying and failing to apply payments, and charging improper fees and insurance premiums.

AHMSI’s Improper Servicing Practices Are Well-Known and Widespread

3. The attorney general of the states of Ohio and Texas have initiated enforcement 1 Available at https://www.ahmsi3.com/servicing/ahmsi_aboutus.asp (last viewed on October 24, 2010). Actions against AHMSI, based on its unfair and deceptive acts and practices against borrowers in connection with its mortgage servicing activities, including, inter alia, failing to properly credit borrowers’ payments, using false claims that borrowers did not make payments in order to justify the imposition of late fees and the establishment of escrow accounts, and refusing to submit any agreements giving them rights and any title to Kapsis’ loan.

4. The Dallas and Northeast Texas Better Business Bureau has given AHMSI an “F”rating (on a scale of A+ to F), citing 718 complaints that have been filed about AHMSI as well as government enforcement actions, despite its being in business for only two and a half years.

AHMSI Routinely and Systematically Harms Borrowers By Improper Servicing Practices

5. AHMSI’s improper and illegal servicing of Kapsis’ loans is typical of its treatment of borrowers. AHMSI routinely and systematically assesses unwarranted fees against consumers, refuses to accept late payments which are resulting in premature default that often gives rise to unfair and improper foreclosure proceedings. As alleged herein, AHMSI’s illegal, unfair, and deceptive business practices victimize borrowers across the United States, and violate both federal and state laws.

6. As exemplified by its treatment of Kapsis, AHMSI routinely seeks to collect, and does collect, various improper fees, costs and charges (hereinafter collectively “improper charges”), including unnecessary foreclosure fees, escrow account overcharges, and other fees that are either not legally due under the mortgage contract or applicable law, or that are in excess of amounts legally due.

7. AHMSI also routinely mishandles borrowers’ mortgage payments and fails to timely or properly credit payments received, resulting in late charges, delinquencies or default.

8. AHMSI similarly mishandles borrowers’ escrow accounts, including by improperly establishing unnecessary escrow accounts for property taxes that homeowners have previously paid directly to the taxing authorities.

9. It is also AHMSI’s routine practice to refuse late payments covering properties securing loans serviced by AHMSI, including in instances where a borrower has an agreement in place with them, and then to charge the borrower unnecessary and excessive legal fees re re-instate the loan.

10. The Ohio Attorney General seeks, against AHMSI, a permanent injunction that would enjoin the defendant servicers from initiating further “unfair and deceptive” loan modifications, consumer restitution, civil penalties, and other damages. These lawsuits further seek to require each defendant servicer to implement improved customer service processes for Ohio borrowers, such as timely responding to borrower requests for loss mitigation assistance, staying foreclosure actions during loss mitigation negotiations, and providing borrowers with copies of forbearance agreements. In his lawsuit, the Ohio Attorney General said American Home required borrowers to sign loan modifications, forbearance agreements and security-retention agreements that contain “illegal and unfair provisions and are unconscionably one- sided” in the company’s favor. American Home also provided “incompetent, inadequate and inefficient customer service, ” lost documents and failed to respond to requests by borrowers for assistance, according to the complaint.

11. The Texas Attorney General is seeking a permanent injunction against American Home as well as civil penalties. It is alleged in the complaint that American Home (a) made repeated telephone calls to consumers with intent to harass, (b) failed to credit payments made by consumers, (c) falsely claimed that consumers had not made payments so as to justify late fees, (d) force-placed duplicative insurance policies, (e) withdrew funds from consumers’ bank accounts but failed to credit the amounts to consumers’ American Home accounts, (f) failed to timely post consumers’ payments, (g) refused to accept payments and then assessed late fees and made false reports to credit bureaus, and (g) repeatedly sent dunning letters to consumers who were not in default.
1 State of Ohio v. American Home Mortgage Servicing, Inc., Case No. CV-09-708888, Court of Common Pleas, Cuyahoga County, Ohio; (Last viewed October 29, 2010)
2.State of Texas v. American Home Mortgage Servicing, Inc., Cause No. 2010-3307, 448th Judicial District Court, El Paso County, Texas.
3 Available at http://www.bbb.org/dallas/business-reviews/mortgage-processing/american-home-mortgageservicing-in-coppell-tx-90019109 (last viewed on December 6, 2010).
4 Case 3:10-cv-02146-B VahHauen et. al v. AMHSI (last viewed on June 14, 2011)(case terminated)
5. There are 941 cases filed by and against AHMSI listed in PACER
6. See complaints http://www.ripoffreport.com/directory/American-Home-Mortgage.aspx
American Home is facing similar allegations in other lawsuits. The cases are Kay VanHauen v. American Home Mortgage Servicing Inc., 10-02146, U.S. District Court, Northern District of Texas (Dallas); State of Texas v. American Home Mortgage Servicing Inc., 2010-3307, District Court of El Paso County, Texas;; Michael Landi v. American Home Mortgage Servicing Inc., 10-00921, U.S. District Court, District of Maryland (Baltimore); Kenneth Coplin v. American Home Mortgage Servicing Inc., 3:10-cv-01096, U.S. District Court, Southern District of California (San Diego).

The improper charges and failure to accept payments often result in forcing the consumers into default under the terms of their mortgages, resulting in further improper and unauthorized fees and charges to their accounts, which are controlled by AHMSI.

12. AHMSI routinely treats borrowers as in default on their loans even though the borrowers have tendered timely and sufficient payments or have otherwise complied with mortgage requirements or applicable law.

13. The effect of AHMSI’s practices is to render homeowners ostensibly in default under the terms of their loans. This results in AHMSI initiating and conducting foreclosure of the homes.

14. Thus, throughout the time period relevant hereto, AHMSI has engaged in a systematic course of conduct designed to increase its corporate profits to the detriment of borrowers, as described above. The components of this scheme involve common tactics, including, but not limited to:
a) failing to credit payments received in a timely fashion, thus generating late fees and
profitable default-related charges;
(b) failing to provide consumers with timely or clear information about the timing and
amount of payments owed;
(c) failing to accept and credit payments, or misapplying payments received;
(d) mishandling escrow accounts, including improperly establishing escrow accounts;
and
(e) imposing and collecting fees that have been improperly assessed, and for which proper
notice has not been given.
I am filing a class action suit do not need your money... Need your verified complaint to submit to my attorneys
email me at [email protected] or mail your complaint to me at Jim kapsis PO Box 132 Albertson, NY 11507
THESE PEOPLE NEED TO BE STRAIGHTEN OUT ONCE AND FOR ALL

In November, I was late with a payment. We had a really rough month in October, and I was unable to make the insurance payment for the home, as well. Of course, AHMSI paid the insurance, but refused to tack on an additional hundred dollars or so to my monthly payment, as Option One had done in a prior year. Since then, I have accrued late fees, and late fees on my late fees. I have paid over 7000.00 since the end of October, only to be told by them I still owe nearly 4000.00. When we paid them a lump sum of 3000.00 in an attempt to catch up in early Feburary (this was not our only payment in the meantime- we have been giving them the usual payments in the meantime), they made the charge twice, and refused any appeal to please put that money back- we only authorized one payment of 3000.00, but they took a total of 6000.00. When I told them I had 4 kids to feed, they said that there was no way they could return the money, and it could take up to 30 days to resolve the issue. I asked them what was I supposed to feed my children in the meantime- they didn't care. I should be behind about 1000.00 by my calculations, but now, I am at the risk of forclosure because they don't seem to know how to apply the payment recieved to the right balances owed.

And I hate how whenever you actually get an operator on the line, the first thing they say is "You owe us [so and so], how do you intend to pay that today".