Borrowers say they learned of an 11.25% second-lien rate only at signing - and that was just the start
A California couple is suing CrossCountry Mortgage and servicer Select Portfolio Servicing, alleging a closing-table interest rate shock and months of mishandled payments.
The lawsuit, filed April 27 in the US District Court for the Central District of California, names CrossCountry Mortgage, loan officer Tobie Love, Select Portfolio Servicing, and the three nationwide credit bureaus. Plaintiffs Ashlynne Van Selus and Brian Henderson, a Temecula couple, bring twelve causes of action under federal statutes including TILA, RESPA, the Fair Debt Collection Practices Act, the Electronic Funds Transfer Act, and the Fair Credit Reporting Act, plus California claims for fraud, breach of fiduciary duty, conversion, and civil theft.
The story the borrowers tell, according to their filing, is one many in the mortgage industry will find familiar in shape, if not in scale. In August 2024, they say, they were pre-approved for a single mortgage at a quoted 6.125% interest rate, with a $125,000 down payment on a $1.075 million home. They submitted an offer relying on that letter.
Then, less than two weeks before closing, the deal allegedly changed. The complaint says the lender pulled back the original approval and restructured the financing, requiring a second mortgage, the payoff of various third-party debts, and roughly twice the original cash to close - $250,317.83 in all.
The interest rate on that second lien, the filing alleges, was not disclosed until the borrowers were already at the closing table on October 1, 2024. The first-lien Closing Disclosure went out around 2 p.m. The second, allegedly carrying an 11.25% rate, arrived about two hours later. The plaintiffs say they were repeatedly told, "this is the only way it's going to get done," and that promises to quickly refinance the second loan were never kept.
The complaint leans on California Civil Code § 2923.1, which treats mortgage brokers as fiduciaries who must put the borrower's economic interest first. The plaintiffs argue the loan officer's conduct, which they attribute to CrossCountry Mortgage as her employer, breached that duty and tripped TILA disclosure rules tied to subordinate-lien loans.
The servicing claims against Select Portfolio Servicing are just as sharp. The filing alleges SPS opened an unauthorized escrow account, "misplaced" a May 2025 payment, ran automatic debits after the borrowers revoked permission, parked roughly $15,073.56 of payments in a suspense account, and sent a January 14, 2026 letter raising the prospect of foreclosure. SPS, the filing alleges, then reported the account as delinquent to TransUnion, Equifax, and Experian, which the plaintiffs say verified the information without a real investigation.
The defendants have not yet responded to the suit, and no court has ruled on the claims.
