Status Update: December 18, 2020
The Court's order of December 10, 2020 has been amended by stipulation so that the judgment shall be entered on or about March 1, 2021. The stipulated order is posted to the Court Documents section of this website.
As amended, the money judgment in favor of the Class against Flagstar shall cover the period through December 31, 2020 and interest-on-escrow shall accrue to sub-class members January 1, 2021 and be payable directly to sub-class members effective January 1, 2022, or when a sub-class member's relationship with Flagstar terminates, whichever is sooner. It remains the case that, if Flagstar appeals the judgment, it could take years for this case to resolve. In the event of a proposed settlement, class members will be sent a notice, Plaintiffs will post a motion for attorney fees to this website within 35 days of entry of the judgment.
Status Update: December 10, 2020
The Court granted summary
judgment in favor of the Class on December 10, 2020. The ruling is posted to the
Court Document section of this website. The order provides for a money
judgment in favor of the Class against Flagstar covering the period through
December 31, 2019, and requires Flagstar to begin paying interest-on-escrow to
all sub-class members effective January 1, 2020. If Flagstar appeals the
judgment, it could take years for this case to resolve. In the event of a proposed
settlement, class members will be sent a notice.
The information contained on this website is
only a summary. You may download a copy
of the full Notice in English by clicking here and in Spanish by clicking here.
Please read this carefully, as it explains a
lawsuit that affects your legal rights.
If you were directed to this website by
an email or postcard, this notifies you that you may be a member of a class
(the “Class”) in the case William Kivett,
et al. v. Flagstar Bank, FSB (the “Lawsuit”), which is now pending in the
United States District Court for the Northern District of California (the
“Court”).
This Lawsuit involves the portion of
mortgage payments that Flagstar Bank collects for some borrowers in advance and
holds in escrow to pay for property taxes, property insurance, and other charges
related to the property. The Lawsuit alleges that a California law, known as
section 2954.8(a) of the Civil Code (“section 2954.8”), requires Flagstar Bank
to pay interest on these funds at the rate of two percent during the period
that it holds the funds in escrow on the borrowers’ behalves. Flagstar Bank
asserts that it does not have to comply because section 2954.8 is preempted by
federal law and complying with section 2954.8 would significantly interfere
with its banking powers.
Judge William Alsup, of the United
States District Court for the Northern District of California, presides over
this Lawsuit, entitled William Kivett and Bernard and Lisa Bravo v. Flagstar
Bank, FSB, Case No. 3:18-cv-05131-WHA. The named persons who brought this
Lawsuit are known as the “Lead Plaintiffs.” Judge Alsup has certified them to
represent the “Class.” Flagstar Bank is also known as the “Defendant.”
The Court has not
decided whether the Lead Plaintiffs or Defendant are correct; this is the
subject of a trial which will be set for March, April, or May of 2020. By certifying the Class
and authorizing this Notice, the Court is not suggesting that the Class will
prevail at trial on this case. The Class must prove its claims at trial.