The Daily Gazette - Schenectady, NY
Daily Gazette

Man who sued over foreclosure fees settles suit
Wednesday, May 14, 2008

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— A Slingerlands man who attempted to wage a federal class action lawsuit against CitiMortgage and its Queens law firm that allegedly charged excessive foreclosure-related fees has settled the case.

With his attorney unable to track down similar fee-hammered homeowners, Edward Herzog individually reached an agreement with the St. Louis-based CitiMortgage and Sweeney, Gallo, Reich & Bolz, of Rego Park. U.S. District Court Judge Lawrence Kahn in Albany dismissed the case Monday.

The Queens firm in October commenced on CitiMortgage’s behalf a foreclosure action against Herzog, a construction worker who had fallen behind on mortgage payments for his Bullock Road home.

In January, Herzog filed the suit against CitiMortgage and Sweeney to contest legal fees, such as a $1,050 charge stemming from an allegedly false summary judgement motion.

Herzog’s Glenville attorney, Richard DiMaggio Jr., categorized such fees as an “attempt to extort funds from consumers who are hard pressed as it is.”

DiMaggio initially expected to include in the suit’s proposed class about 100 CitiMortgage borrowers who had also been sued by Sweeney. But that plan hit a snag when he could not find other homeowners who had paid Sweeney’s fees. Some may have been dislocated by a foreclosures.

“It would be difficult finding people who abandoned their home and moved on,” said DiMaggio, who wrote “Collection Agency Harassment: What the Debt Collector Doesn’t Want You to Know” (2002).

However, finding people in foreclosure is not as hard a task. During the first quarter, the number of properties in various stages of foreclosure in the five-county area around Albany increased more than fivefold to 608, compared with a year earlier, according to RealtyTrac.com, an Irvine, Calif., foreclosure tracking agency.

By November, Herzog faced $6,961 in unpaid mortgage payments, late fees and servicing fees. On top of that, Sweeney charged him $3,656 in legal fees. Although Herzog later paid off his CitiMortgage debts, the law firm refused to drop its suits against the homeowner.

DiMaggio declined to comment on the terms of the settlement. Sweeney attorney Terence McCormick said “The firm does not admit to any wrongdoing.”

Herzog’s home was in foreclosure when he filed the suit five months ago, but since then his mortgage issues have been resolved, DiMaggio said.



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