Wells Fargo Mortgage Payoff Statement Class Action Settlement

Wells Fargo Bank NA has reached a settlement in a class action lawsuit alleging it violated the Truth in Lending Act (TILA) by issuing payoff statements that did not credit or disclose property insurance claim funds held by Wells Fargo and which were potentially available to be applied to an account.

If you are a borrower with a mortgage serviced and owned by Wells Fargo and received payoff statements that failed to disclose property insurance claim funds, and/or if you had a mortgage (or mortgages) serviced and owned by Wells Fargo in which Wells Fargo was holding the insurance proceeds, you may be entitled to benefits from the mortgage payoff statement class action settlement.

TILA is a federal law that requires lenders and mortgage servicers to provide, upon a borrower’s written request, an accurate statement listing the total outstanding balance required to terminate the borrower’s loan obligation.

Plaintiff Latasha McLaughlin alleges Wells Fargo violated a section of TILA by issuing payoff statements that did not credit or disclose property insurance claim funds held by Wells Fargo and which were potentially available to be applied to McLaughlin’s loan balance.

McLaughlin claims that the insurance funds she was to receive following damage to her residential property and which were held by Wells Fargo at the time she requested a payoff statement should have been reflected on the statement.

On Oct. 29, 2015, a California federal court issued an order holding that the payoff statement should have deducted the payoff funds that were still held by Wells Fargo and should have, at minimum, included a note that the insurance funds could potentially be used for home repair if the loan was not paid off.

Wells Fargo denies any wrongdoing but agreed to settle the class action lawsuit to avoid the burden and expense of ongoing litigation.

The Wells Fargo class action settlement was preliminarily approved on Nov. 18, 2016. Class Members who would like to exclude themselves from or object to the Wells Fargo settlement must do so no later than Feb. 9, 2017.

Who’s Eligible

Class Members of the Wells Fargo settlement include:

• Damages Class: All borrowers with mortgages serviced and owned by Wells Fargo who, between June 23, 2014 and June 23, 2015, received payoff statements that failed to disclose property claim funds; and/or
• Declaratory Relief Class: All borrowers with mortgages serviced and owned by Wells Fargo wherein Wells Fargo was holding insurance proceeds on June 22, 2016.

Potential Award

Varies.

Under the terms of the class action settlement, Wells Fargo will offer cash payment to members of the Damages Class. The actual amount of compensation will be determined on a per account basis. It is anticipated that each Damages Class Member will receive a payment of at least $2,500.

Members of the Damages Class and the Declaratory Relief Class will benefit from Wells Fargo’s practice changes. Wells Fargo has agreed to revise its template payoff statement letter to disclose property insurance funds it holds.

This disclosure will be directly below the total amount due identified in the letter. In addition, Wells Fargo will add language to notify borrowers that the funds can be applied to the total amount due if they are not used for repairs to the property.

Proof of Purchase

N/A

FAQs

FREQUENTLY ASKED QUESTIONS»

Claim Form Deadline

N/A. Class Members who do not opt out of the Wells Fargo settlement will automatically receive benefits.

Case Name

McLaughlin v. Wells Fargo Bank NA, Case No. 3:15-cv-02904-WHA, in the U.S. District Court for the Northern District of California

Final Hearing

3/9/2017

UPDATE: The court granted final approval of  Wells Fargo Mortgage Payoff Statement class action settlement on April 11, 2017.  Let Top Class Actions know when you receive a check in the comments section below or on our  Facebook page.

Settlement Website

www.MortgagePayoffStatementClassAction.com

Claims Administrator

McLaughlin v. Wells Fargo Class Action
c/o Garden City Group (GCG)
P.O. Box 10315
Dublin, OH 43017-3915
1-877-351-3539

Class Counsel

Patricia Avery
Matthew Insley-Pruitt
WOLF POPPER LLP

Kristin J. Moody
BERMAN DEVALERIO

Defense Counsel

Peter J. Kennedy
Ashley L. Shively
REED SMITH LLP