Sarah Mirando  |  February 27, 2012

Category: Legal News

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Chase, Wells Fargo Mortgage Fee Abuse Class Action Lawsuit

By Sarah Pierce

 

Wells FargoWells FargChaseo and JPMorgan Chase have been hit with a class action lawsuit alleging that the two lending giants cheated hundreds of thousands of borrowers who were late on mortgage payments by charging excessive and abusive default fees.

The class action lawsuit claims Wells Fargo and Chase charged homeowners over-inflated fees once they began to fall behind in their mortgage payments, sometimes by as much as 300 percent. Together, the two lenders service approximately 25 percent of all U.S. mortgages, which means they may have potentially defaulted borrowers out of a billion dollars or more, attorneys for the Class estimate.

“Loan agreements require that default-related services must be reasonable and appropriate,” said an attorney representing the Class. “Banks are not allowed to mark up the charges so they can make a profit, but that is exactly what they have done.”

The amount of the inflated or unnecessary charges the banks charge can very, running as low as $20 to as much as $135, the class action lawsuit says. The fees are charged when a borrower is late on a payment, and the bank’s computer programs begin the default process by levying fees against the borrower.

In addition to charging unnecessary and marked-up fees, the class action lawsuit says the banks concealed the fees through “cryptic wording.” These fees are typically listed on a borrower’s monthly statement as “other charges,” “miscellaneous charges” or “corporate advances” in an attempt to hide the true nature of the charges, the class action lawsuit says.

According to the class action lawsuit, one of these fees the banks charge is used to hire a real estate broker to assess the value of the home based on similar properties. The real estate agent’s assessment is called the broker’s price opinion (BPO) and is used to help the lender price the property for foreclosure.

Federal law allows lenders to charge these BPO fees, but they are not allowed to mark up the charges or perform unnecessary services and make a profit, which is what Wells Fargo and Chase have done, according to the suit.

“Our investigation has revealed that as a result of these practices, banks often make more money from loans that are in default than loans that are current,” a Class attorney said. “Loan agreements require that default-related services must be reasonable and appropriate.”

The Wells Fargo and Chase RICO class action lawsuit is brought on behalf of all U.S. residents who had a loan serviced by Wells Fargo or Chase and whose accounts were assessed fees for default-related services, including Broker’s Price Opinions, and inspection fees, at any time, continuing through the date of final disposition of this action.

The case is Latara Bias, et al., v. Wells Fargo & Company, JPMorgan Chase & Co., et al., Case No. 12-cv-0664, U.S. District Court, Northern District of California.

UPDATE: On Oct. 31, 2016, Wells Fargo agreed to pay $50 million to settle a class action lawsuit claiming they imposed excessive and abusive fees on borrowers who were late on their mortgage payments.

UPDATE 2: The Wells Fargo Mortgage Fee Class Action Settlement is now open! Click here to learn more. 

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Updated February 27th, 2012

 

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29 thoughts onChase, Wells Fargo Mortgage Fee Abuse Class Action Lawsuit

  1. Avis ann stahler says:

    I want in this lawsuit.

  2. Lorraine says:

    I went through hell with Chase and Wells Fargo mortgage for 7 years! I want to know if I am part of class action suit

  3. Donna Tabernacki says:

    I had a mortgage with Wells Fargo as gar back as 2000. I currently have a loan out with Chase bank & have had many issues when I was late with my payments & they were foreclosing on my property. I went through lost paperwork, on their part. Or them saying they never received it! Was assigned many so many different case workers. They dragged it on so long that I almost lost my house!! I took the loan out back in 2005 along with my husband who has since passed away in 2010. We initially took the loan out for $32,000 & 12 years into the loan I currently owe $30,500.38. This was & currently still is a revolving loan. But I haven’t been able to use it since we spent the whole line of credit which I believe was back in 2005. We took this loan out when I was 40 yrs old and I was going to a local college & we wanted to pay our vehicle & some bills off. So in 12 yrs, I have “only paid less then $2,000”!!! OMG! I just realized it!! The Recoverable Corporate Advance is $8,403.33. Need some help & additional info please.

    1. Dimitra R Moss-Gray says:

      I stay at 8611 Texas Acorn Are Wells Fargo sent letter concerning my homeland force next move and offer me 6,000 dollars to relocate I still have the paperwork they took my home from me

  4. Top Class Actions says:

    UPDATE 2: The Wells Fargo Mortgage Fee Class Action Settlement is now open! Click here to learn more. 

    1. Pamela Crumpton says:

      Please send me info how I can get into the class action lawsuit. I had an account with Wells Fargo for years.
      My email address is Crumpton64@gmail.com

      1. Top Class Actions says:

        Here’s the TCA article with the Wells Fargo mortgage fee settlement details: https://topclassactions.com/lawsuit-settlements/closed-settlements/448525-wells-fargo-mortgage-fee-class-action-settlement/. You can contact the settlement administrator with any questions about the settlement or the status of your claim. Good luck!

  5. Donna Gilliard says:

    Please contact me I presently have a loan with Wells Fargo. I feel like they have charged me numerous fees.

  6. Top Class Actions says:

    UPDATE: On Oct. 31, 2016, Wells Fargo agreed to pay $50 million to settle a class action lawsuit claiming they imposed excessive and abusive fees on borrowers who were late on their mortgage payments.

    1. Kelly Peters says:

      How far back does this go? They screwed me as far back as 2007 to 2008…maybe even 2006. They are a bunch of crooks.

      How do I sign up for this?

      1. Top Class Actions says:

        Here’s the TCA article with more details about the settlement: https://topclassactions.com/lawsuit-settlements/lawsuit-news/348499-wells-fargo-settles-mortgage-fee-abuse-class-action-lawsuit/. The article includes a link to the settlement website, but information on the claims process and claim forms are not yet available.

  7. Lisa says:

    I received a check today as well. Trying to get more information before I cash it.

  8. Dawn says:

    We also received a check today. Do we cash it or no?

  9. willm. says:

    Received a check from Chase today (9/30/2016) along with a letter explaining this to be for compensation for corporate advance fees. The letter emphasized that “no action is required on your part”. Has anyone else been reimbursed in this manner??

    1. Alabama T. Squirrel says:

      Yes, I have also received a healthy check. But by cashing it am I agreeing to a smaller agreement?

    2. Karen Brown says:

      I, too, received the same letter and a check dated 9/26/2016. The corporate advance fees were included in the modified mortgage, in addition to property preservation (house was never vacant) and foreclosure fees (no foreclosure). Chase even rolled into the modified mortgage City taxes that I PAID!

    3. Andrew says:

      I too received a check from Chase with the same accompanying letter. This week I received a 1099-MISC for the amount of that check, claiming this is income to me. How can this be income if it was to be a reimbursement for overcharges?

  10. C Russell says:

    I would lie to know how to be part of this case. I have been in a battle with Wells Fargo on my home for several years.

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