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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
I had my mortgage through them 2000 to 2011. They had my mortgage so messed up that to this day I’m still trying to straighten it out because they added 57,000 on to my mortgage and I don’t know where it came from. There were so many things that went wrong when I was with them
I owned my home and refinanced and lost it in 2008. I went to a lawyer who told me that Wells Fargo doomed me to fail. He called it Shylock tactics
Had a loan with Wells Fargo and almost lost it. What a rip of scam!
I owned my home and refinanced and lost it in 2008. I went to a lawyer who told me that Wells Fargo doomed me to fail. He called it Shylock tactics
I had the perfect storm starting in 2007-08. Divorce after 30yrs, job loss due to my boss suddenly dying, couldn’t find another job to save my soul, maybe due to feeling totally defeated.
I had at least 200K in the bank but the banks refused to renegotiate my loans because I “didn’t have a job.” I did odd jobs, whatever I could, but there was more money going out than coming in.
By 2010, most of the money was gone and the banks made my life a living hell, calling day and night, coming to the house, telling me that the police would come to throw me out on the street. I do believe that some of the hell I went through was created by the “investor” who wanted me to get moving so he could flip my house. I desperately needed someone who understood what was going on to help me see out of the confusion. It seems that I was attracting the worse there is out there. To avoid becoming homeless I went back to school for a Masters thinking that polishing my skills would help me. Although I have “survived” my life was twisted and I’m suffering from a neurological condition, perhaps from the extreme stress and conditions faced, unnecessarily.
I lost my home to foreclosure from a loan that they issued to me based on Overtime. They demanded a letter stating my overtime was consistent. Even though they shouldn’t have, my company provided me with one. Two years later, overtime dried up. I was going though a divorce, could afford the payments. I did a loan modification which only required me to sign. It was approved and I was able to make one payment. Then money got even tighter and I had to wait a few months to make another payment. I was then told that even if I paid even part of my monthly, it wouldn’t matter, any money I sent would go to a temporary account and not towards the home loan. I would continue to accumulate late fees and charges against my total amount until I paid in full the late fee. So I would be broke AND still be behind on my mortgage. It took 4 years but I finally had enough to afford the monthly payments, I was told that it was too late, the property was in foreclosure and nothing could be done about it. Oh! I tried to do a modification loan around 2 years into my no-payment period to get my loan back into green. They sent me paperwork which required my ex-wife’s signatures. When I called and asked why the previous modification didn’t require her signatures? They said simply, “oops, somebody made a mistake”. Was my previous mortgage modification invalid then? “Nope, it’s still legally binding” I was told. They even at one point paid people to drill my locks out while I was away on a business trip trying to make enough money to get caught up. Posting a sign saying that the property had been reclaimed for abandoning reasons. I still lived there. They illegally entered my home and changed the locks.
Maybe you can help. Maybe not. I don’t know.
I applied for a loan modification with Wells Fargo but after submitting all the information was told I didn’t make enough and it was turned down. About 7-8 month later I received a letter offering a modification..not enough to save my house but it saved $400/month…the follow year, maybe =10 months later Wells Fargo settled with a State of California lawsuit and all people who were denied a modification received $125k…but if you received a modification you weren’t eligible…now I know why they offered me a slight modification..I had to shirt sale my house..
I lost my home in 2010. Same issue.
Wells Fargo bankrupted us in 2012. They promised a loan modification and adjusted our payments for 6 months to only pay half of the payment and after the 6 months they were going to rewrite the loan and put the difference at the end of the loan. They lied and wouldn’t take phone calls the voice mailboxes were full. Then we received a foreclosure notice. We had to file Chapter 13 to save our home. Wells Fargo is a disgusting lender. They almost destroyed us. The mental anguish and stress my husband and I faced was unjust. I would like added to any class action against this scumbag company. We deserve justice for what they put us through. They also charged us 10,000 because of a clause written in the loan. They are predatory lenders and disgusting in my opinion.
So people can’t read or do research on what types of mortgages to get or ask questions? The consumer needs to take responsibility too. They were the ones to sign the documents for the loan. It’s not rocket science. They had a choice to go to another company. And no, I do not work at a financial institution. It’s called common sense.
I lost my home in 2012 I had to redo paper work tons of times until they foreclosed never working with me
I lost my home in2018 Wells was the loan holder we were in litigation with 5hem from 2010 trying to get the hamp they told us to stop paying and they never even completed the application kept loading papers, changing personnel and making us start all over. It actually killedmy husband all the stress I am no homeless it was a little an that went up not down pick a pay and my attorney said it was so predatory he had never seen anything like it now I have no husband and no home pathetic!!!