Wells Fargo Sued in Hidden Fees Class Action Lawsuit

On Sept. 9, Wells Fargo was sued in a hidden loan fees class action lawsuit filed by a California resident who alleges the bank breached contract with consumers by charging borrowers unnecessary and exorbitant fees in order to maximize Wells Fargo’s profits.

According to the Wells Fargo class action lawsuit, the popular banking establishment allegedly concealed or omitted improper loan fees connected to their commercial real estate loan services.

Plaintiff Fred Gober alleges Wells Fargo created an entity known as Real Estate Technical Services Group, or RETECH, in order to carry out the hidden loan fees scheme. He also claims that by neglecting to disclose the loan fees and falsely stating that the fees stem from third-party appraisers, Wells Fargo makes itself look as if the bank is providing more appealing terms to borrowers.

“Wells Fargo presents its commercial real estate borrowers with a written document wherein Wells Fargo purports to only charge fees in connection with the line items specifically identified, leading the borrower to believe that those fees that have been zeroed out have been waived,” the Wells Fargo hidden loan fees class action lawsuit alleges. “However, Wells Fargo is adding a hidden underwriting fee to the third-party vendor’s appraisal fee.”

It is Wells Fargo’s general practice to require borrowers to sign and submit a business banking loan application, which Gober alleges he did in March around the same time he states he had completed the purchase of a gas station and convenience store located in Washington. According to the Wells Fargo hidden loan fees class action lawsuit, the terms of the gas station/convenience store sale required Gober to take out a loan and deliver a $500,000 promissory note secured by deed of trust to the sellers of the property.

Gober alleges that when Wells Fargo received the loan application, the bank detailed $8,300 fees, which included a $3,000 appraisal fee. Wells Fargo told Gober that the third-party appraisal was required in order to receive the loan and that the bank would take care of choosing the appraiser.

A month after submitting his application, Gober received an email from Wells Fargo, stating that the bids for appraisal of his property were expensive because “apparently appraisers are not cheap.” In the email, Wells Fargo listed the least expensive appraisal bid as $4,350 instead of the previously quoted $3,000. The plaintiff claims that at no point during his correspondence with Wells Fargo did the bank disclose to Gober that a portion of the appraisal charge was an underwriting fee charged for in-house review of the vendor’s appraisal of the sales property.

Subsequently, Gober received a request for $5,040, which included a slightly cheaper $4,340 appraisal fee; however, when the plaintiff received a copy of the appraisal he discovered that the fee assessed was actually $3,500. When Gober inquired about the difference, the bank replied that $840 of the extra amount went to an underwriting fee for in-house review by RETECH and another $700 was assessed for an environmental report review.

This Wells Fargo class action lawsuit claims that RETECH was created by Wells Fargo for the sole purpose of making alleged hidden fees appear as third-party costs when in fact RETECH employees are employed by Wells Fargo.

Gober has filed this hidden loan fees class action lawsuit on behalf of himself and a proposed Class of all U.S. individuals who were assessed undisclosed fees for certain services regarding commercial real estate loans performed by Wells Fargo internally since Sept. 9, 2011.

The plaintiff is represented by Christopher P. Ridout and Hannah P. Belknap of Zimmerman Reed LLP, Joseph Henry Bates, Randall K. Pulliam and Tiffany Wyatt Oldham of Carney Bates & Pulliam PLLC, and Richard Golomb and Kenneth Grunfeld of Golomb & Honik.

The Wells Fargo Hidden Loan Fees Class Action Lawsuit is Gober, et al. v. Wells Fargo & Co., et al., Case No. 2:15-cv-07120, in the U.S. District Court for the Central District of California.