Lawsuit Against Wells Fargo
Wells Fargo Lawsuit Shows Borrowers Could Have Been Avoided From Foreclosure
A group of whistleblowers filed a class action lawsuit against Wells Fargo Mortgage. They alleged that the Wells Fargo Mortgage Fraud was used by the Wells Fargo Bank to purposely keep its customers from getting mortgages approved. Subprime mortgages were issued by Wells Fargo with inferior loans and interest rates in order to steer potential customers away from lenders who would give them better rates. The lawsuits contend that Wells Fargo allowed its employees to falsify information on applications in order to inflate numbers and cover up loan deficiencies.
The number of lawsuits against Wells Fargo has risen dramatically over the past year.
Since early August, when the Federal Housing Administration (FHA) began investigating Wells Fargo for fraudulently underwriting loans, the company has been dealing with hundreds of complaints. Some of the lawsuits are from current homeowners who say that they have been repeatedly pushed through a process that has made them sub-prime and unable to refinance their homes. Others are from homeowners who say that the company made misrepresentations about mortgage rates, loan qualifications and income to get a mortgage. Many of the lawsuits were brought on behalf of people who died or were disabled while living at home.
When homeowners apply for mortgage refinancing, the process is usually quite straightforward.
There are no complex documents to sign or wait on. Homeowners fill out an application and are then sent documents by mail to verify information. If there are problems, the homeowners simply send back the forms, and the mortgage company does nothing. But apparently, some homeowners did not think that there was an option before signing papers.
There are many underlying reasons why the lawsuits against Wells Fargo are being brought.
One of the lawsuits points to a “systemic” problem that went unnoticed by regulators and homeowners. Regulators have since been bombarded with communications from Wells Fargo employees saying that they had reviewed the applications of every customer and found no errors. The lawsuits say that regulators were never told of these investigations. In one case, Wells Fargo employees actually ordered a legal document from the Office of the Comptroller of the Currency with the wrong information and instructions to regulators.
Other lawsuits say that homeowners could have avoided getting a loan in the first place if they only applied at a different bank.
Some say that the original lenders have a poor reputation and don’t have very good track records. Others point to sloppy paperwork and a push towards aggressive sales tactics. Customers need to know that Wells Fargo was aware of these problems, but did nothing to correct them.
Whatever the cause, the lawsuits show that homeowners faced real problems with Wells Fargo.
There is no question that the original loan was flawed. But if regulators did not find problems with the loan, why would homeowners face foreclosure? The lawsuits also show that there are other predatory lending companies out there that have done very little to help homeowners in need. These companies can easily take advantage of a borrower’s desperate situation. When this happens, it can be too late to save a home.
