Borrower claims servicer kept billing old rate—and never responded to inquiries
Mr. Cooper is facing a federal lawsuit alleging it billed a borrower at the wrong interest rate after failing to update a loan modification.
The case, filed January 28 in the United States District Court for the Southern District of Florida, puts a spotlight on something every mortgage servicer knows matters but sometimes gets lost in the shuffle: making sure successive loan modifications actually show up correctly on billing statements.
According to court filings, Florida homeowner Jami Gatewood Sjogreen took out a mortgage with Blue Chip Lending Services in January 2020. She later received two loan modifications. The first, effective October 1, 2021, set her interest rate at 5.125 percent. The second, effective June 1, 2022, dropped that rate to 3.125 percent.
Here is where it gets interesting for servicing professionals. The lawsuit alleges that Sjogreen's monthly statements kept reflecting the old 5.125 percent rate—not the newer, lower one. When she noticed the discrepancy, she hired an attorney to dig into it.
Her legal team sent a formal Notice of Error and Request for Information to Mr. Cooper on September 19, 2025. The servicer received it four days later. Federal rules give servicers thirty business days to respond to these requests. According to the lawsuit, Mr. Cooper never did.
A follow-up notice went out on November 11, 2025, offering an extra ten days to respond. That letter arrived on November 17. Still nothing, the lawsuit claims.
The case alleges violations of the Real Estate Settlement Procedures Act and Regulation X, both of which require servicers to acknowledge and respond to borrower inquiries within specific timeframes. These are not suggestions—they are enforceable obligations with real teeth.
Adding to the complexity, the loan has changed hands several times. It moved from MERS to Lakeview Loan Servicing in August 2021, then to Flagstar Bank in September 2024, and most recently to Wilmington Savings Fund Society as trustee for a residential credit trust in November 2025. Mr. Cooper handles the servicing.
The borrower is seeking damages and wants the court to order Mr. Cooper to provide the information she requested. A jury trial has been demanded. No final determination has been made in the case.
For servicers watching from the sidelines, the takeaway is straightforward. When a borrower gets multiple loan modifications, those changes need to land correctly in the billing system—every single time. And when a Regulation X information request hits your desk, silence is not a strategy. Even if you believe you have a perfectly good explanation, saying nothing invites exactly this kind of legal headache.
