Mr. Cooper and Lakeview Convenience Fee Settlements: Refunds Already Paid, Claims Closed

Mortgage servicers sometimes charge a "convenience fee" to take a payment over the phone or through an automated phone system. Borrowers call these pay-to-pay fees. Two class actions challenged Mr. Cooper's version of the fee:

• Maryland: Baxter v. Lakeview & Mr. Cooper, Case No. C-02-CV-22-000654, in the Circuit Court for Anne Arundel County. Plaintiff Tonda Baxter claimed Lakeview Loan Servicing and Mr. Cooper improperly charged Maryland borrowers a fee for paying by telephone.
• District of Columbia: Jackerly McFadden, et al. v. Nationstar Mortgage LLC, d/b/a Mr. Cooper, Case No. 1:20-cv-00166, in the U.S. District Court for the District of Columbia. It alleged the fees violated the Fair Debt Collection Practices Act and was handled by a U.S. Magistrate Judge.

Both Mr. Cooper and Lakeview deny they did anything wrong, and neither court decided whether the fees were unlawful. Nationstar Mortgage LLC is the legal name of the company that does business as Mr. Cooper. These fees are one example of the hidden fees consumer suits often target.

The McFadden class period ran from May 26, 2018 to November 8, 2023. A Mr. Cooper borrower outside Maryland and D.C. whose loan was current when servicing transferred and was not FHA-insured was not in either class. In both cases, class members were identified from Mr. Cooper's records and notified by mail or email.

Maryland (Baxter v. Lakeview and Mr. Cooper)

According to the class notice, Mr. Cooper voluntarily refunded $982,907.22 in convenience fees to Maryland class members after the suit was filed, which class counsel said amounted to more than a 100% recovery of the fees collected. The settlement itself paid no new cash to class members. Instead, Mr. Cooper agreed to donate $37,200, half to Habitat for Humanity and half to the Housing Initiative Partnership, less administration costs, and to pay class counsel $114,240. A charity payment like this is a form of cy pres relief.

District of Columbia (McFadden v. Nationstar)

The notice said the D.C. class covered 780 accounts that paid the fee 5,767 times, and the nationwide class had paid $5,617,750 in fees after refunds. Payments were automatic by check, or electronic for those who chose it by February 16, 2024. Checks were valid for 90 days. See how settlement money is divided.

Neither settlement required a claim form, because Mr. Cooper's own payment records showed who paid each fee. In the McFadden case, class members who did nothing were mailed a paper check, and those who chose an electronic payment were eligible for a secondary distribution if money was left from uncashed checks. In the Baxter case, the refunds had already been made before the settlement.

If you believe you were owed a McFadden payment and never received it, contact the settlement administrator at 1-866-709-2460. Be careful with the old McFadden settlement website: as of September 2026 it displays unrelated gambling links alongside the settlement text, which suggests it has been tampered with. Do not enter personal or bank information there. Our guide to missing settlement checks and our settlement scams guide explain safer ways to follow up.

As of September 2026, both settlements are closed: the Maryland refunds were paid before the settlement, and the D.C. settlement received final judgment on April 25, 2024. The Baxter settlement website is no longer online.

If you were in either class and did not opt out, you released claims about the phone payment fees covered by the settlement. The Maryland notice says Mr. Cooper has stopped charging fees to borrowers who make payments by phone. If you are charged a new fee to pay your mortgage, ask the servicer in writing which loan document authorizes it, and you can file a complaint with the Consumer Financial Protection Bureau.

Borrowers with other servicing problems, such as fees added to a loan balance or debt collection calls, can read our FDCPA guide and our debt collection harassment page. If you believe a servicer charged you unauthorized fees after these settlements, a free case review can connect you with independent attorneys who handle these cases.

Other settlements over bank and lender fees include the Wells Fargo CARES Act settlement and the Wells Fargo bankruptcy reporting settlement. For a separate Lakeview matter, the company's 2021 data breach, check our settlements list for current claims.