5 Class Action Lawsuit Lawyers Hiring for Wells Fargo Loan Modification
You may have heard about a Wells Fargo loan modification class action lawsuit. It is the latest in a series of legal cases involving the mortgage lender. Classes like this are not very common and can only be found in high-profile cases like the one against Wells Fargo. The class action lawsuit against Wells Fargo represents several hundred homeowners who collectively filed more than two hundred complaints with the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation.
A class action lawsuit is when a group of people come together as a legal group to pursue a legal claim against an entity, corporation, or individual.
In the case of mortgage modifications, the borrowers who signed up with Wells Fargo are claiming that the bank’s loss mitigation department did not properly complete the paperwork or did not follow state guidelines when it was approving homebuyer insurance. The class-action suit names Wells Fargo, LRT, Countrywide, and the State of Alabama as three entities.
One class in the lawsuit focuses on Wells Fargo borrowers who have been affected by the bank’s loss mitigation department.
Borrowers claim that LRT did not give them enough time to apply for loan modifications, and that Countrywide did not provide consistent forbearance policy declarations. State laws regulating foreclosure require lenders to give borrowers a chance to request forbearance or modification of their mortgage payments. According to the lawsuit, LRT repeatedly violated the statute by not giving borrowers enough time to apply for a modified loan. State laws also require lenders to give borrowers the ability to seek late fees, over-limit fees, and other charges outside of their initial purchase agreement.
Another class in the lawsuit targets Wells Fargo itself. Its loss mitigation department “does not utilize appropriate forms” when dealing with borrowers seeking mortgage loan modification, the lawsuit says. A Wells Fargo representative told the attorney general’s office that the company “took the initiative” for borrowers “initiated” the process by filing the lawsuit. Representatives from Bank of America and Chase Bank were not immediately available for comment.
The third class action lawsuit targets Bank of America and Chase Bank.
Plaintiffs say that they are owed an equal amount in damages and are owed compensation for being wronged by Bank of America and Chase Bank. Both companies are accused of withholding needed information and making false statements to force borrowers into mortgage modification. They are also accused of coercing borrowers into settling for ridiculously low amounts or leaving their homes.
The fourth class-action lawsuit targets Wells Fargo itself.
The attorney general claims that Wells Fargo fraudulently forced borrowers into mortgage payments and then pushed them toward leaving the property when it became impossible for them to stay in their homes. Wells Fargo is guilty of attempting to force borrowers into either foreclosure or bankruptcy. This could be a violation of the Fair Debt Collection Practices Act (FDCPA), according to the complaint.
The fifth class action lawsuit targets Bank of America, and it targets the recalculation error that went into Bank of America’s application for loan modification. When borrowers tried to calculate their payments using the special loan repayment calculation that Bank of America used, the calculation error made the payments balloon to unbelievable amounts. This has hurt a lot of borrowers.
This is not the only thing that has harmed borrowers through Bank of America’s mortgage process.
Bank of America has also been sued over the foreclosure fiasco, after the courts found that Bank of America had engaged in illegal practices in forcing out borrowers’ families. This led to more suits against Bank of America and its Countrywide finance arm, Wachovia, for their roles in pushing loans through Fannie Mae and Freddie Mac that were later illegally foreclosed on by Bank of America and the government. Now, the class action lawsuit targets these companies for their roles in pushing through these policies which hurt borrowers. Wachovia was also named in the suit and is accused of knowingly pushing mortgages into foreclosure on behalf of Bank of America and Countrywide, and then refusing to let homeowners who could not afford these mortgages get their loans refinanced out. Both of these companies have already been found guilty in lawsuits related to their activities, but Wells Fargo is believed to be guilty of a more general policy of pushing loans through without providing enough protection for borrowers.