Champion Mortgage Class Action Lawsuits: Inspection Fees and AARP Case

Champion Mortgage, the reverse mortgage servicing division of Nationstar Mortgage LLC (later Mr. Cooper), has been the subject of several class action lawsuits alleging it charged elderly Home Equity Conversion Mortgage borrowers for unnecessary property inspections and other prohibited fees, along with a 2021 settlement with the New York Attorney General over misleading foreclosure communications. The Champion reverse mortgage portfolio was sold in 2021 to Mortgage Assets Management (MAM), which now services those loans, but litigation tied to Champion’s servicing practices has continued, and a broader 2026 class action backed by the AARP Foundation targets other servicers accused of the same conduct.¹

Who Services Champion Loans Now

Champion Mortgage serviced Home Equity Conversion Mortgages insured by the Federal Housing Administration, generally on behalf of securitization trusts.² Nationstar acquired the Champion platform from KeyCorp in 2007, and after Nationstar’s 2018 merger and rebrand as Mr. Cooper Group, Champion continued as the company’s reverse mortgage arm.³ In July 2021, Mr. Cooper sold the entire Champion reverse mortgage servicing portfolio — roughly $16 billion in unpaid principal balance — to Mortgage Assets Management, LLC.¹ Existing Champion loans are now serviced by MAM.

The Property Inspection Fee Class Actions

The most direct class action activity naming Champion involves allegations that it used an automated system to order frequent “drive-by” property inspections of borrowers’ homes, then added the fees to loan balances where they accrued interest. Four related federal cases were filed in 2017 and 2018.

Hoggard v. Nationstar Mortgage LLC

The lead case, Hoggard v. Nationstar Mortgage LLC (Case No. 1:17-cv-00099), was filed on January 13, 2017, in the U.S. District Court for the District of Columbia before Judge Timothy James Kelly.⁴ The complaint alleged that Champion declared borrowers in default for failing to return an “Annual Occupancy Certification” form, then assessed monthly inspection fees despite knowing the borrowers were still living in their homes.⁵ The case was terminated on December 30, 2021. The available court record does not specify whether it ended through settlement, dismissal, or another disposition.

The Illinois Cases

Three related class actions were filed in the Northern District of Illinois against Nationstar Mortgage LLC doing business as Champion Mortgage Company:

Nicholson v. Nationstar (Case No. 17-cv-1373), alleging breach of contract, unjust enrichment, and negligence.
Tolford v. Nationstar (Case No. 17-cv-8737), alleging breach of contract, unjust enrichment, and violation of the Illinois Consumer Fraud Act.
Stankiewicz v. Nationstar (Case No. 18-cv-3075), alleging breach of contract, unjust enrichment, and violation of the Illinois Consumer Fraud Act.

All three centered on allegations that Champion used its automated ReverseServ platform to order inspections at preset intervals regardless of whether the property was at risk or the borrower still lived there.⁶ The plaintiffs said Champion violated HUD regulations by inspecting properties more often than the required 25-day minimum interval, running repeated inspections on occupied homes that were supposed to be verified vacant first, skipping required prior notice to borrowers, and in some cases charging for inspections that may not have actually occurred or that lasted only seconds. Plaintiff Rena Nicholson alleged she was charged for five inspections in a single month with no notice. Plaintiff James Tolford alleged he was charged for numerous inspections while actively living in his home after defaulting on property taxes and insurance.⁵

On July 6, 2018, Judge Robert M. Dow Jr. stayed all three Illinois cases under the “first-to-file” rule, finding them duplicative of the earlier Hoggard action in Washington, D.C.⁵ The Tolford case remained listed as open on its docket as of July 2025.⁷

2021 New York Attorney General Settlement

In March 2021, Champion entered into an Assurance of Discontinuance with the New York Attorney General to resolve an investigation into two categories of servicing practices.²

The AG’s office found Champion had sent approximately 3,041 letters to defaulted borrowers using language that gave the false impression a foreclosure lawsuit had already been filed. The letters included instructions like “read the summons and complaint carefully” and warnings about losing one’s home, even though no foreclosure suit had actually been initiated.²⁸ Champion stopped sending them in April 2019. The investigation also found Champion had paid property taxes on behalf of borrowers without adequate notice, sometimes causing borrowers to make duplicate payments or lose the chance to arrange other options.⁹

Nationstar neither admitted nor denied the findings. Champion agreed to pay $500,000 to the Equitable Reverse Mortgage Assistance (ERMA) program, which provides low-cost loans to reverse mortgage borrowers at risk of default or displacement. The funds were earmarked for Champion’s affected New York customers and deposited with the Center for New York City Neighborhoods.² Champion also agreed to improve borrower notifications before paying property taxes, use plain language in default communications, establish an escalation contact for nonprofit housing counselors and legal services organizations, and stop sending the misleading pre-foreclosure letters.⁸

The 2026 AARP Foundation Class Action

On January 16, 2026, the AARP Foundation, with the law firms Tusa P.C. and Giskan, Solotaroff & Anderson LLP, filed a class action in the U.S. District Court for the Eastern District of New York. The case, Rizzati et al. v. Compu-Link Corporation et al. (Case No. 2:26-cv-00277), names three reverse mortgage servicers: Compu-Link Corporation (Celink), Finance of America Reverse LLC, and Carrington Mortgage Services LLC. A companion case seeks to add Longbridge Financial LLC.¹⁰¹¹

Champion Mortgage is not named as a defendant in this suit. The case targets companies that service the same type of federally insured reverse mortgages Champion handled, and one local news outlet covering the filing identified Champion among the reverse mortgage companies involved in the broader dispute.¹² The allegations are worth understanding because they describe the same fee patterns raised in the earlier Champion cases.

The complaint alleges that the defendant servicers systematically charged HECM borrowers thousands of dollars in four categories of fees prohibited by federal law, state consumer protection statutes, and the HECM contract itself: attorneys’ fees, property inspection fees, property preservation fees, and appraisal fees. The complaint cites instances where individual borrowers were charged over $14,000 and $17,000 in attorneys’ fees, despite HUD limiting foreclosure attorneys’ fees in New York to $725. Plaintiffs also allege the servicers compounded the harm by calculating interest and mortgage insurance premiums on loan balances already inflated by the unlawful fees, and pursued foreclosure without required consumer protections such as advance notice, housing counseling, or notice to state agencies like the Office on Aging. The plaintiffs contend the practices have affected tens of thousands of HECM borrowers nationwide since 2012.¹⁰

The five named plaintiffs are family members or representatives of elderly borrowers or their estates: Molly-Jeanne Rizzati, Tamara Simpson, Ellisa Martin, Deloris Whitaker, and Michael Hawkins. They seek class certification nationwide, reimbursement or reversal of the disputed fees along with associated interest and mortgage insurance premiums, damages for breach of contract and unjust enrichment, and injunctive relief.¹⁰¹³

The case was assigned to Magistrate Judge Anne Y. Shields. Plaintiffs filed voluntary dismissals without prejudice against Finance of America Reverse on March 30, 2026, and Carrington Mortgage Services on May 6, 2026, leaving Compu-Link (Celink) as the remaining defendant in the primary case as of mid-2026. An initial conference was held on June 15, 2026, with initial discovery, including loan documents and evidence of fees paid, due by July 15, 2026.¹¹

Related CFPB Action Against Nationstar

Separately, the Consumer Financial Protection Bureau brought an enforcement action against Nationstar Mortgage LLC (doing business as Mr. Cooper) in December 2020, alleging violations of federal consumer financial laws related to mortgage servicing. The action covered Nationstar’s broader servicing operations rather than Champion specifically, but Champion operated as a division of Nationstar throughout the period in question. Under a stipulated judgment entered on December 8, 2020, Nationstar was required to pay approximately $73 million in redress to more than 40,000 harmed borrowers plus a $1.5 million civil penalty. Concurrent settlements with all 50 state attorneys general and bank regulators from 53 jurisdictions brought total consumer recoveries to nearly $85 million.¹⁴

If You Had a Champion Reverse Mortgage

Your loan is now serviced by Mortgage Assets Management, which acquired the portfolio from Mr. Cooper in July 2021.¹ If you were charged property inspection fees, attorneys’ fees, property preservation fees, or appraisal fees during the period Champion serviced your HECM, you may want to gather your loan statements and default correspondence and check the docket in Hoggard v. Nationstar Mortgage LLC and the related Illinois cases for status. New York borrowers who received misleading pre-foreclosure letters or who had property taxes paid without adequate notice fall within the population addressed by the 2021 New York Attorney General settlement, and relief funds were channeled through the Center for New York City Neighborhoods.²

1
HousingWire. Mr. Cooper Sells Champion Reverse Servicing Portfolio to MAM
2
New York Attorney General. Assurance of Discontinuance No. 21-006
3
Champion Mortgage Pros. What Happened to Champion Mortgage
4
CourtListener. Hoggard v. Nationstar Mortgage LLC
5
GovInfo. Tolford v. Nationstar Mortgage LLC, Case No. 17-cv-08737
6
Courthouse News Service. Nicholson v. Nationstar Mortgage LLC, Complaint
7
PlainSite. Tolford v. Nationstar Mortgage LLC
8
HousingWire. New York Attorney General Settles With Nationstar in Reverse Mortgage Disclosure Dispute
9
National Mortgage News. Champion Settles With NY AG for Misleading Reverse Mortgage Borrowers
10
AARP. New Class Action Lawsuit Alleges Reverse Mortgage Companies Charged Illegal Fees to Older Homeowners
11
PACER Monitor. Rizzati et al v. Compu-Link Corporation et al
12
St. Thomas Source. Seniors Alert: AARP Virgin Islands Files Reverse Mortgage Lawsuit
13
South Shore Press. Plaintiffs Allege Mortgage Servicers Breached Contracts With Unlawful Fees
14
Consumer Financial Protection Bureau. Nationstar Mortgage LLC dba Mr. Cooper