The Selene Finance lawsuits currently drawing the most attention are two putative class actions alleging the mortgage servicer sent default and acceleration letters that threatened foreclosure on a timeline federal law does not permit. One case is proceeding in the Middle District of North Carolina after surviving a motion to dismiss. The other, filed in Illinois, was revived by the Seventh Circuit in December 2025 and is back before the district court. Neither has been certified as a class, and neither has settled.
What the Class Actions Allege
The theory in both cases is the same. Selene’s standard “Notice of Default and Intent to Accelerate” letter gives borrowers roughly 30 to 35 days to cure a delinquency and warns that failing to do so “may result in acceleration of the sums secured by the Security Instrument, sale of the property and/or foreclosure.”
Federal mortgage servicing rules under Regulation X generally bar a servicer from starting foreclosure until a borrower is at least 120 days delinquent. Plaintiffs say that when Selene sends these letters to borrowers who are only a month or two behind, the threatened consequences cannot legally happen within the stated window. The letters, they argue, are effectively empty threats meant to pressure quick payment, and that pressure violates the Fair Debt Collection Practices Act and parallel state consumer protection statutes.
England v. Selene Finance (North Carolina)
Christel England and other plaintiffs filed suit against Selene Finance in 2023 in the U.S. District Court for the Middle District of North Carolina, case number 1:23-cv-00847. The complaint asserts claims under the FDCPA, the North Carolina Debt Collection Act, and the North Carolina Collection Agencies Act.1Today’s General Counsel. Federal Court Allows Class Action Over Mortgage Servicer’s Deceptive Language
The plaintiffs argue that the word “may” in Selene’s notice would read to a “least-sophisticated consumer” as an immediate threat of foreclosure, and that the letter therefore threatens action Selene has no intention of taking, in violation of FDCPA sections 1692e(5) and 1692e(10).2McCarter & English LLP. Class Action Alleging Deceptive Mortgage Acceleration Notice Language Proceeds
Selene moved to dismiss in December 2023. Judge Thomas D. Schroeder granted the motion in part, dismissing a negligent misrepresentation claim and one plaintiff’s individual FDCPA claim, but let the FDCPA, North Carolina Debt Collection Act, and North Carolina Collection Agencies Act claims proceed.3Justia. England et al. v. Selene Finance LP
Selene has argued in its defense that the challenged language is “nearly verbatim” the wording required by the standard Fannie Mae/Freddie Mac North Carolina security instrument, raising the question of whether a servicer can be held liable for using a form the government-sponsored enterprises prescribe.2McCarter & English LLP. Class Action Alleging Deceptive Mortgage Acceleration Notice Language Proceeds No class has been certified. The case remains active.
Milam v. Selene Finance (Illinois and Seventh Circuit)
Ramona Milam sued Selene in federal court in Illinois over a letter dated April 17, 2023. At the time she received it, her payment was 47 days overdue, and the letter gave her 35 days to cure. Even if she had used the full window, her loan would have been about 82 days delinquent at the deadline, well short of the 120-day threshold at which foreclosure could legally begin.4FindLaw. Milam v. Selene Finance LP
Milam brought claims under the FDCPA, the Illinois Consumer Fraud and Deceptive Business Practices Act, and a state-law negligent misrepresentation theory, on behalf of Illinois homeowners who had received similar letters when at least 45 days delinquent.4FindLaw. Milam v. Selene Finance LP
The district court initially dismissed the case. It accepted Selene’s argument that the company was an “assignee” of the original lender, which would have required Milam to give notice and an opportunity to cure before filing suit. Milam appealed.
On December 22, 2025, a Seventh Circuit panel reversed. Writing for the court, Judge Michael Y. Scudder held that the pleadings alone did not show whether Selene was truly an assignee of the mortgage or simply a company delegated to collect payments, and that Selene’s servicing agreement was not in the record to resolve the question.5GovInfo. Milam v. Selene Finance, No. 25-1208 The panel also found Milam had Article III standing. She had alleged concrete monetary harm: bank overdraft fees and borrowed money to cover essentials like health insurance premiums after making the mortgage payment under pressure from Selene’s letter.6Public Justice. Milam v. Selene
The Seventh Circuit’s holding that “authorizing a servicer to collect payments does not automatically transfer the lender’s contractual rights” is significant for how servicers may defend against similar consumer protection suits.6Public Justice. Milam v. Selene The case has been remanded and is proceeding in the district court.
The Rhode Island Foreclosure Ruling: Aubee v. Selene Finance
A separate case addressed different notice language and does not fit the acceleration-timeline theory above. In Aubee v. Selene Finance LP, No. 20-1321, the First Circuit ruled on December 21, 2022, that a 2018 Rhode Island foreclosure was invalid because the pre-foreclosure default notice was “fatally defective.”7FindLaw. Aubee v. Selene Finance LP FSB
The problem was confusing language about borrower rights. The notice used “and/or” to link the right to assert defenses in a foreclosure proceeding with the right to bring an independent court action, which the court found could mislead borrowers into thinking one right depended on the other. The notice also referred to asserting defenses in “the foreclosure proceeding,” suggesting a judicial process, when the actual foreclosure was non-judicial and provided no such forum.7FindLaw. Aubee v. Selene Finance LP FSB
Under Rhode Island law, strict compliance with a mortgage’s notice provisions is required for a valid foreclosure, and the court held that a notice fails that standard if it is “reasonably likely to mislead borrowers about how to assert their rights, even as it informs them of those rights.”7FindLaw. Aubee v. Selene Finance LP FSB The court reversed dismissal of a breach-of-contract claim against the loan’s trustee, Wilmington Savings, but affirmed dismissal of the claims against Selene itself because Selene was not a party to the mortgage contract.
Other Recent Suits
In March 2026, Amina Kamara filed suit alleging that Selene refused to recognize her as a successor-in-interest on a mortgage and failed to respond to a qualified written request under the Real Estate Settlement Procedures Act. Selene moved to dismiss, arguing the plaintiff did not qualify as a “borrower” under RESPA.8RESPA News. Amina Kamara et al. v. Selene Finance LP
In May 2026, the New Jersey Appellate Division affirmed dismissal of claims by homeowner Roberto Paradiso against Selene and a loan trustee. Paradiso had alleged breach of the covenant of good faith and fair dealing, promissory estoppel, and violations of the New Jersey Consumer Fraud Act in connection with a loan modification. The court found the claims barred by the law-of-the-case doctrine because the underlying issues had already been litigated in prior foreclosure proceedings, and it held that the modification agreement was enforceable and unambiguous.9New Jersey Courts. Paradiso v. Selene Finance et al.
Who Selene Finance Is
Selene Finance LP is a residential mortgage servicer licensed in all 50 states and the District of Columbia. It is an approved servicer for Fannie Mae, Freddie Mac, the FHA, the VA, and the USDA. As of June 2025, Selene serviced roughly 155,900 residential loans with a total balance of about $42.2 billion, specializing in non-performing and re-performing loans alongside prime servicing. The company is headquartered in Dallas, Texas, with an additional office in Jacksonville, Florida.10Fitch Ratings. Fitch Upgrades Selene Finance LP US RMBS Servicer Ratings Selene’s parent company was acquired by Pretium Partners in late 2019.11HousingWire. Growing Real Estate Giant Pretium Buys Selene Finance
What to Watch Next
The two acceleration-notice class actions are where the important rulings are likely to come from. In North Carolina, the next major question is class certification. In Illinois, the district court will now have to work through whether Selene was actually an assignee under its servicing agreement, and if not, the FDCPA and state consumer-fraud claims will move ahead on their merits. Because the letters at issue use language drawn from standardized mortgage forms, how these courts rule could affect other servicers that send similar notices.