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A class action lawsuit has been filed against Wells Fargo Bank by a customer who claims that the company miscalculated a mortgage modification, which led to the foreclosure of her home.
Tracy Dore states that she purchased her home in 2008 and subsequently entered into an agreement with the defendant to pay $500 a month as a mortgage payment.
She says her mortgage was guaranteed by a federal agency and a government sponsored entity was the servicer of the mortgage.
Dore claims that Wells Fargo was required to consider her for a mortgage loan modification based on the mortgage agreement and federal regulations.
In 2013-2014, the plaintiff reportedly lost her job and experienced economic hardship which resulted in her mortgage going into default. She then learned about possibly getting a mortgage loan modification through a federal program called Home Affordable Modification Program (HAMP), which was created in response to the subprime mortgage crisis of the late 2000s.
The Wells Fargo class action lawsuit states that the plaintiff applied for a HAMP mortgage modification via the defendant.
The plaintiff claims that HAMP utilizes a net present value (NPV) to figure out whether it would be beneficial to provide a mortgage modification or whether it would be better to continue with the present terms of the mortgage.
The defendant automatically calculated attorneys’ fees associated with a foreclosure as one part of the NPV calculation, the plaintiff alleges. However, Dore states that these calculations were not correct, which meant that hundreds of NPV calculations were not correct for loan modifications.
“Approximately 300 Class members continued to struggle with high mortgage payments that would have been lowered had Defendant correctly calculated their NPVs,” the Wells Fargo class action lawsuit argues.
“Due to this financial hardship, Class members have had to default on loans, take out additional, high interest loans, sell property, and/or file for bankruptcy.”
The plaintiff claims that if the defendant’s software was not faulty, or if the defendant had just used the government’s free software, her NPV calculation would have been different and she would have been accepted into HAMP.
Had she been approved for a mortgage loan modification, she would not have foreclosed on her home and would have been able to stay in her house, the plaintiff states. Dore claims that she was forced to find a new home and currently pays $1,000 in rent.
In July 2019, the plaintiff received a letter from Wells Fargo stating that her mortgage loan modification was erroneously calculated and that she should have been approved for a trial application under HAMP.
The letter that Wells Fargo sent to the plaintiff included a check for $24,700, which the defendant stated would “help make up for [Plaintiff’s] financial loss.” However, Dore claims that this payment is not enough to compensate for her significant losses.
“Defendant’s check is wholly insufficient to make up for Plaintiff’s financial loss, including the greater financial hardship she experienced when her mortgage loan modification was denied, the foreclosure and loss of her home, loss of value and equity in her home, and subsequent expense, defamation, and inconvenience,” the Wells Fargo class action lawsuit alleges.
A similar class action lawsuit was filed against Wells Fargo in February 2019 when plaintiffs claimed that they were denied a loan modification due to a software glitch.
Did you apply for a mortgage loan modification through Wells Fargo Bank? Leave a message in the comments section below.
The plaintiff is represented by D. Aaron Rihn of Rovert Peirce & Associates PC and Daniel C. Levin, Charles E. Schaffer and Nicholas J. Elia of Levin Sedran Berman LLP
The Wells Fargo Loan Modification Class Action Lawsuit is Tracy Dore v. Wells Fargo Bank NA, Case No. 2:19-cv-01601, in the U.S. District Court for the Western District of Pennsylvania.
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126 thoughts onWells Fargo Class Action Says Faulty Math Lost Home
I had my home foreclosed on after several attempts at a modification due to a bad skiing accident kept me out of woe for 3 months, lost everything including my pride. I hate them nothing but thieves. The stress of this was overwhelming and I had a mental breakdown.
I was denied twice even after 2 trial modification plans.
I had 9 loans between my husband and I. When the market fell we applied for modifications , we got all units preforming. They kept sending me in circles plus the same year my payments went up 20%. The rents could not support the increase. I had never been late on the morgtages until then
I was declared the Successor of Intrest for my deceased grandparents home. I was denied for a loan modification and was forced to pay over twenty thousand dollars, with a two week deadline to keep the property.
I had a modification that went bad. They gave me 2 weeks after the modification to come up with this ridiculous amount of money and I told them how did they come up with that number and the next week I was in accelerated foreclosure. Like the next week if I didn’t hurry up and sale, with all the equity that was in my home, they sent certified packages everyday threatening me! My first HOUSE.
We finally were approved for a Hamp loan however it barely lowered our monthly rate but extended our loan an additional 10 years to start it at a 40 year loan we had to do a short sale on our house in Lieu of going into foreclosure
This was after Wells Fargo gave us a mortgage knowing my husband had lost his job we tried to back out of the property and gave us an $80,000 home equity line to pay the mortgage with until he found another job
My modification went terrible! More years at a higher interest rate and 4,700 of escrow disappeared. Even though i have a escrow overage they are upping my payment so the $20 a month my payment went down is going away the first yr
Every store that I’ve read closely resembles my own and what my family was made to endure by Wells Fargo. It is sad that people jump through the hurdles of home ownership only to face a hardship and have their home simultaneously stolen from them due to faulty practices by the bank and eventually to have it all swept under the rug. As if displacing the family isnt enough you are faced with now having to rebuild and pay more than you were paying in your home.
My situation is no different however I know vindication is within reach. I wish for only the beat outcome for us all and will allow the universe to shift the energy to make the outcome far greater than the impact that we’ve already faced. Darkness can only survive temporarily.