Wells Fargo ‘Fraudulent’ Mortgage Servicing Fees Bankrupt Homeowners, Put Homes at Risk, Class Action Alleges

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 Wells Fargo Inspection Fees Class Action Overview:

• Who: A homeowner whose mortgage is serviced through Wells Fargo has filed a new class action lawsuit against the bank.
• Why: The plaintiff alleges the bank charged her and other homeowners millions of dollars in property inspections that were not required.
• Where: The lawsuit was filed in federal court in New Jersey.

A fraudulent mortgage servicing scheme run by Wells Fargo, which sees the bank collect illegal fees for property inspections, has bankrupted homeowners and caused them to lose their homes, a new class action lawsuit alleges.

The nationwide class action lawsuit was filed in New Jersey by lead Plaintiff Jane Hart who alleges that the bank illegally charged her and other homeowners that were in dire financial straits millions of dollars in property inspection fees that were not required, “putting their homes in jeopardy and, in some instances, resulting in bankruptcy.”

According to the class action lawsuit, Wells Fargo uses a computer system to automatically assess fees for property inspections without regard to the terms of the borrowers’ mortgage loans or the relevant circumstances.

“Instead of being based upon reasonable parameters, the computer system was programmed to assess as many charges as possible and to pay first all outstanding fees and costs before satisfying interest and principal,” the claim reads.

According to the claim, the computer-generated inspections are unreasonable, confer no benefit on the lender, and serve no discernible purpose other than to generate revenue for Wells Fargo, and that is further evidenced by the limited nature of the inspection themselves.

“The property inspections ordered by the Wells Fargo computer system are mere ‘drive-by’ inspections, i.e., the inspector “drives by” the property ostensibly to assess whether the house is occupied, being maintained, and has not been damaged- a practice that provides little, if any, real opportunity to determine whether the lender’s interest in the property is at risk,” the class action lawsuit reads.

It adds that Wells Fargo personnel do not read the inspection reports. As a result, the observations contained in the initial inspection have absolutely no bearing on whether another inspection will be ordered in 20 or 45 days.

Hart’s mortgage loans were serviced by Wells Fargo from their origination with World Savings Bank, FSB in 2004, until it transferred its responsibilities to another servicer effective April 2021, according to the class action lawsuit.

Wells Fargo began to charge Hart’s mortgage account for inspection fees beginning in May 2011, after Hart missed payments on her mortgage, according to the class action lawsuit. Despite Hart entering into a payment agreement with the bank, it charged her $20 for each inspection conducted between May 2011 and March 2012, and $15 for each inspection conducted after March 2012, the lawsuit says. Many of those inspections were double ups or unwarranted, it adds. Wells Fargo continued to charge Hart’s mortgage account for property inspection fees until at least October 2018.

Wells Fargo has profited enormously from this fraudulent scheme, the lawsuit states, with fees paid by Hart and others generating the bank hundreds of millions of dollars in revenue.

The claim adds that Wells Fargo repeatedly sent Hart “materially false and misleading agreements, contracts, and monthly mortgage statements” that concealed the nature of the improper and unlawful inspection fees by listing them on the borrower’s statement only as “other charges.”

Hart wants to represent a nationwide and New Jersey Class of mortgage holders who have been charged unwarranted inspection fees by Wells Fargo. She is suing for breach of contract, and violation of state consumer laws and federal racketeering laws.

She is seeking certification of the Class, order of enjoinment, damages, interest, legal fees and costs, and a jury trial.

Have you ever been charged a property inspection fee that you think was unwarranted? Tell us about your experience in the comments section!

Hart is represented by Catherine E. Anderson of Giskan Solotaroff & Anderson LLP and Roosevelt N. Nesmith of the Law Offices of Roosevelt N. Nesmith LLC.

Wells Fargo has not yet made an appearance in the case as of late Friday.

The Wells Fargo Inspection Fees Class Action Lawsuit is Hart v. Wells Fargo Bank NA, Case No. 1:21-cv-14644, in the U.S. District Court for the District of New Jersey.

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