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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
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At 23 I bought my first home and the underwriter at Wells Fargo accepted (unbeknownst to me) $500 to push my loan through. 17 years later and they cannot sale my loan because it was predatory and illegal.
Wells Fargo kept trying to make me pay on a mortgage that I paid off for months. I had even gone to Main Bank and showed them my paperwork as proof. I had to totally drop all my accounts at Wells Fargo.
I’d like to Sue mountain West financial because they did not approve me for a loan and I ended up paying thousands more in interest because they did not approve me and I almost lost $10,000 deposit.
Please add me?
Several attempts to refinance- required I default for 3 months to claim hardship- refused to take HARP saying their investors would not accept- feed in lieu – they made $50k over and above original cost of home – basically they took the house from us intentionally. (In my opinion)
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I got a home loan through them fixed rate, the payment amount kept going up. I asked for a modification, was given one that was more than the original payment. Tried to refinance to get away from them but I could not. Lost my home 4 years ago and have been homeless ever since.Wells- Fargo is the devil and should be put out of business.
I was given a home loan in 2001….I made $30,000/annually and was approved for a $105,000 mortgage. After several years of attempts to get a loan modification or some assistance my home was foreclosed on in 2007. I feel that they pushed this loan through knowing I would eventually have problems paying.
Yes I did and they kept pushing a loan modification. Still ended up not being able keep up with all the fine print. Shame on them!