FIRST UNION CASE STUDY

You mean I have to pay for my monthly mortgage statement? This plaintiff found out what First Union was doing, was wrong.

Around June 1993, Jack Ziegler and his wife took out a mortgage to refinance an existing residential mortgage, with American Financial Mortgage Corporation, which then sold the mortgage to Germantown Savings Bank.

For several years, the Zieglers made on-time, monthly payments to Germantown Savings Bank until CoreStates Mortgage Service Corporation took over the mortgage in February 1995. The Zieglers continued to make their monthly payments to CoreStates until April 1998 when the mortgage was acquired by First Union Mortgage Corporation.

First Union Mortgage then began sending the Zieglers monthly mortgage statements, which started showing a $1.00 charge for "other", tacked on to the monthly mortgage payment amount. There was no explanation for the charge, but the Zieglers continued paying it without question from June 1999.

Around November of 2000, Alliance Mortgage Company announced its agreement with First Union that it would handle payment processing, escrow disbursements, customer service and default management for approximately 70,000 First Union mortgage loans, including that of the Zieglers.

The $1.00 surcharge continued to show up on the Zieglers' monthly statements and they continued to pay until finally, in April 2001, they wrote to Alliance and First Union asking for an explanation of the charge (as previous phone inquiries had not produced an answer).

Alliance looked into the matter and issued a letter, explaining that the $1.00 charge was initiated by First Union to cover the cost of providing a monthly bill - and that Alliance was simply "continuing this service on your behalf". When asked where in the mortgage permission to make such a charge existed, the Zieglers received a letter stating that because the mortgage company is, in effect, doing them a favor by providing payment coupons with the monthly statement, they reserve the right to charge for any optional services, such as monthly bills, to offset expenses for this service.

They then stated, since payment coupons were never promised in the mortgage, such service fees needn't be mentioned in the mortgage.

First Union Mortgage is being charged with Two Counts of Claims for Relief for inappropriately charging fees that were never mentioned in the mortgage agreement.