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Wells Fargo Predatory Homes Loan Lawsuit:
- Who: Wells Fargo, Wachovia Mortgage, FSB, Golden West Savings Association and Mortgage Electronic Registrations Systems, Inc have all been named in a California borrower’s lawsuit.
- What: Wells Fargo and other loan servicing bodies are accused of preying on first time home buyers with bad loans that were designed to fail.
- Where: The lawsuit was lodged in California court.
Wells Fargo and a group of affiliated mortgage lenders use deceptive tactics to push customers into a “complicated, risky and expensive” loan so they can sell as many loans as possible to third party investors while the customer defaults, a new lawsuit alleges.
Oakland resident John H. Ellis filed the lawsuit July 6 in a California Superior Court against Wells Fargo, along with its “alter egos” Wachovia Mortgage, FSB, Golden West Savings Association and Mortgage Electronic Registrations Systems, Inc (MERS).
Ellis alleges he and tens of thousands of other borrowers were coaxed into adjustable rate mortgages that were “technically engineered” to end in default, foreclosure, and eviction.
The lenders ran a scheme in which they concealed the fact that ordinary homeowners obtained home loans “riddled with a timed-bomb”—such as adjustable rate, pick-a-pay, and negatively amortizing loans—designed to “systematically and dramatically increase monthly payments to the extent that the payment terms, conditions and provisions extended far beyond affordability,” the lawsuit says.
Ellis says, as a result of Wells Fargo’s actions, “literally millions” of unsuspecting new home buyers have become victims to a host of adjustable mortgage loan schemes.
“With revenue generated from down payments and monthly payments, and eventually foreclosure, the bank creates an endless stream of income for itself,” Ellis says.
“Defendants have not only bilked naive home buyers, but have deprived counties and the State of revenue to which they were legally entitled.”
Wells Fargo ‘Trapped’ Borrower With Predatory Home Loan
Ellis says he entered into a loan agreement with Wells Fargo. That loan was eventually transferred to multiple subsequent services through transactions facilitated by MERS.
Realizing that no financial institution would refinance the loan, and as his payments got higher, he contacted the lenders and asked for assistance under the Home Owners Loan Act and the Obama administration’s Federal Mortgage Assistance Program. However, while in negotiations, the lenders continued to foreclose on him.
Ellis says he was “maliciously trapped in a classically predatory loan contract,” after which Wells Fargo created false documents, including declarations of defaults and notices of sale to avoid its obligations.
He’s suing Wells Fargo for fraudulent concealment, originating falsified documents and foreclosing on homeowners in the Federal Making Home Affordable Plan.
“As a direct and proximate result of the deceptive and unfair loan lending practices tens of thousands of borrowers have been placed in an unaffordable loan engineered to self-destruct (foreclose).”
Ellis is suing under the False Claims Act and the California False Claims Act. He’s seeking restitution and damages of between $3.75 million and $6.25 million, plus interest, fees and costs.
In September, Wells Fargo made a deal with home loan customers who lost their homes in an $18.5 million settlement that, if approved by the court, will end a class action lawsuit alleging bank errors led to mortgage holders losing their homes to foreclosure.
A month earlier, the bank was accused in a class action of running a fraudulent mortgage servicing scheme, which saw Wells Fargo collect illegal fees for property inspections, resulting in bankrupted homeowners.
Did you get a home loan through Wells Fargo? Let us know your experience in the comments.
The Wells Fargo Home Loan Whistleblower Lawsuit is John H. Ellis., v. Wells Fargo et al., Case No. 3:21-cv-08042, in the Superior Court of the State of California County of Alameda
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61 thoughts onWells Fargo, ‘Alter Egos’ Sold Predatory Home Loans ‘Engineered’ to Foreclose, Claims Borrower’s Lawsuit
Lost family home of 30 years with shady pick your payment loan. Spent 2 years trying to modify the predatory loan and I mean everyday faxing them the paperwork they kept making me reduce because of the lag every month something was always needing refaxing. I was 60 miles away everyday having to drive and fax. They were court ordered to modify these neg amort loans without my help. COURT ORDERED. After hiring a lawyer who took over 6, 000 to send in the same docs as I had been doing for 2 solid years they had said they would modify. The papers were completely false numbers by atty to get wf to agree and they were now waiting for the 3 payments that were nearly 3 xs the amt I had been paying. To make matters worse they didn’t even send that contract on time so it automatically defaulted the loan mod. Uh hello? Then the final kick in the ass was they illegally sold our home for the EXACT price as we were trying to mod for to a dude that was in bed with Wells Fargo at an unannounced auction. R u f ng kidding me? It’s ruined my life my mother’s 100 this year and it was the final straw…she has literally seen everything now. Shame on you wf for robbing me of a home. Haven’t been able to recover since 2/17. I want in on that class action suit. Add me please.
WF did a predatory loan on me and then embezzled $65k out my escrow. I have my statements to prove it. Plus their forged my name onto an insurance check for repairs to my home.
Paid 5k to pull out of foreclosure twice only to be charged false inspection fees( claims notice received no check) falsely claim the did not have my 401k, but WELLS constant mail letters to me but when i would call i was aged off the system, reported false info to credit bureau after ch 7 for credit card and foreclosed house, faxed refinance documents from bank locations only to be told random pages were missing each time, attended NACA event sat there all day only to be told i was 61 days past due and nothing provided in writing