Steven Cohen  |  October 29, 2019

Category: Banking News

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wells fargo bankA class action lawsuit filed against Wells Fargo related to a software malfunction that made some mortgage borrowers lose their homes will continue after a U.S. federal judge denied the bank’s motion to dismiss.

Plaintiffs Monty and Michelle Coordes filed the class action lawsuit in February of this year, claiming that Wells Fargo did not compensate them after a software glitch resulted in hundreds of mortgage loan modifications being denied.

The judge’s opinion states that the Coordes’ sought loan modification assistance from Wells Fargo after Mr. Coordes became temporarily unemployed in 2010. In August 2010, the couple was offered a trial modification, according to the judge’s order.  

After filing for chapter 13 bankruptcy, the couple again looked to Wells Fargo for a loan modification, but were denied, and in 2012, they lost their home in a foreclosure sale.

The judge’s order states that in 2018, Wells Fargo told the public that a calculation in its internal mortgage loan modification software resulted in 625 applications being denied, when they should have been granted. In December 2018, Wells Fargo reported that the number of applications that were denied was actually 870, according to the judge’s order.

The judge states that after Wells Fargo contacted the plaintiffs via a letter and a check for $15,000 (which, after arbitration, turned into $25,000), the plaintiffs filed this class action lawsuit against Wells Fargo for violation of Washington Consumer Protection Act (CPA) and unjust enrichment.

Wells Fargo then filed a motion to dismiss the case for failure to state a claim, says the judge’s order. 

“Specifically, Defendant argues Plaintiffs’ CPA claim is an impermissible attempt to enforce the federal Home Affordable Modification Program (‘HAMP’), which creates no private right of action,” the judge’s order continues.

The judge opined that, “construing the factual allegations in the light most favorable to Plaintiffs, these allegations are sufficient to state a plausible claim for relief.”

In addition, the defendant claimed in its motion to dismiss that the plaintiffs CPA claim was precluded because it looked to enforce the Home Affordable Modification Program (HAMP).

But, the court opined that the plaintiffs’ claim for relief involves behavior that is related to the defendant’s participation in HAMP but is looking to enforce a separate cause of action instead of the actual terms of the HAMP agreement.

The judge’s opinion states, “Although this conduct is related to Defendant’s HAMP participation, Plaintiffs do not seek to enforce HAMP. Instead, Plaintiffs allege this conduct constitutes unfair or deceptive conduct in violation of the CPA.” Thus, the motion to dismiss the case was denied, according to the judge.

Wells Fargo also moved to dismiss the plaintiffs’ unjust enrichment claim arguing that, “the existence of an express contract between the parties precludes a quasi-contract claim.”

“Because the benefits alleged to be the subject of the unjust enrichment are governed by the parties’ express contract, Plaintiffs are not able to maintain their unjust enrichment claim,” wrote the judge.

Did you apply for a loan modification through Wells Fargo? Leave a message in the comments section below.

The plaintiffs are represented by Derek W. Loeser, Chanele N. Reyes, Gretchen Freeman Cappio, Alison E. Chase and Matthew J. Preusch of Keller Rohrback LLP.

The Wells Fargo Loan Modification Class Action Lawsuit is Coordes v. Wells Fargo Bank NA, Case No. 2:19-cv-00052, in the U.S. District Court for the Eastern District of Washington.

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40 thoughts onWells Fargo Can’t Escape Software Glitch Class Action

  1. Dwayne Mason says:

    my home was taken from me in Sept. 2018 by Wells Fargo when my loan was denied saying i got a thirty cents raise and had to show a loss of income. My ex wife’s salary was my loss of income. I owned a property at 956 Cobble Ridge Rd. in Nashville, NC .My property was valued at $154,000. If possible can you please help me get some compensation for my property that was wrongfully taken.

  2. Joanne RANSOME GRIGGS says:

    Illegal foreclosure Wells Fargo Phoenix AZ we need help GRANDMOTHER ILLEGALLY PUT OUT OF HOME AT 73 YRS OLD 480370 3998

  3. Hendricks says:

    Please reach out to me

  4. Mike says:

    please reach out to me

  5. Margaret Weikel says:

    Please contact us

  6. JACQUELINE CUMBY says:

    Yes, I lost my home too. I was told the day my modification was to be approved, my loan was bought by another bank.
    I paid over 5k trying to save my home and ripped off in 2010!

  7. steve says:

    same here

  8. Angela judd says:

    I lost my home because of Wells Fargo and the loan modification issues

    1. Jessica Laneiro says:

      Yes! Me too! I can’t seem to find an actual website dedicated to this? Does anyone know additional info?

  9. Wallace Christina says:

    We filed for a Government Modification in February of 2010. We signed a contract stating that we were being considered for approval and that we are to start making the modified payments. Right off the bat I got a note back, after I made my first payment, telling me I sent it to the wrong place when, actually, I sent it to the address I was given on the contract. Our troubles started from there. Every month they would tell me new stuff I had to do, like calling them once a month. After making the agreed-upon payments for around six months, they said we were delinquent on our mortgage. I called them about it and they proceeded to demand proof of income for all of the months we had been making the payments. I faxed all the information to them. After seven months of making the payments they said we did not qualify for the modification loan, and they were going to foreclose. They have never contacted us regarding the “computer glitch” that resulted in people being erroneously denied approval.

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