Top mortgage firms accused of unfair loan practices—find out which companies are in the hot seat
Big mortgage names are under scrutiny in Pennsylvania, where a new federal case filed on November 13, 2025, accuses lenders and servicers of predatory practices and unfair treatment of borrowers.
The story starts in 2001, when Irene Murphy and the late Willie Mitchell took out a $26,400 loan to fix up their Philadelphia home. They say they were promised straightforward, fixed payments over thirty years. But as the years went by, the numbers didn’t add up. According to their filing, the couple ended up paying nearly $70,000 to PHH Mortgage over almost two decades—yet the loan balance, they discovered, was still more than $21,000.
The suit names Delta Funding Corporation, Wells Fargo Bank, PHH Mortgage, and Ocwen Loan Servicing, LLC, along with mortgage brokers McGlawn & McGlawn, Inc. and McGlawn Mortgage Co., Inc. The borrowers claim they were never told about variable interest rates, hidden penalties, or mounting fees. They also allege that the brokers misrepresented their relationship with Delta Funding and failed to explain the true cost of the loan.
What’s more, the case raises serious questions about who gets targeted for these kinds of loans. The Mitchells say they were singled out as a low-income, African-American family, and that African-American women in particular were charged higher fees than others. The filing suggests these practices were not isolated, but part of a wider pattern in certain neighborhoods.
The borrowers also say that PHH Mortgage tried to collect fees and interest that shouldn’t have been charged, and even moved to foreclose on their home to collect the disputed balance. They’re asking the court for damages, a return of funds, and to wipe out the remaining debt.
For mortgage professionals, this case is a wake-up call. It’s not just about one family’s experience—it’s about the importance of transparency, clear communication, and fair dealing in every transaction. The companies named are some of the biggest in the business, and the issues raised—disclosure, compliance, and borrower treatment—are ones that resonate across the industry.
No court has ruled on these claims, and the outcome is still to be determined. But the case is already sparking conversations about best practices and the need for vigilance in lending and servicing. It’s a reminder that the details matter, and that trust is built on honesty and accountability.
As this case unfolds, mortgage professionals everywhere will be watching closely. Whether you’re a lender, servicer, or broker, the message is clear: how you treat your clients today could shape your reputation—and your business—for years to come.
