Wells Fargo Home Loan Class Action Filed Over Date ‘Corrections’

A class action lawsuit has been filed against Wells Fargo Bank NA alleging that the mortgage lender unlawfully “corrected” agreements for thousands of customers’ Wells Fargo home loan terms. Plaintiffs have accused Wells Fargo of altering maturity date on loans, a change they claim damages home values and marketability for mortgage holders.

The complaint was filed by Philip and Ingrid Tippett of Florida. The Tippetts claim that Wells Fargo unlawfully changed the maturity dates on their home equity line of credit after realizing it had failed to set that loan to terminate after the mortgages’ final maturity date.  According to the class action lawsuit, failing to adjust these dates would have resulted in the debts becoming unsecured – increasing the bank’s risk that they won’t be paid.

However, rather than informing customers of the mistake so that they could authorize a change, Wells Fargo allegedly took it upon itself to unilaterally file thousands of documents meant to  “correct” the maturity dates in order to make them compliment the home equity loans. These documents are reportedly referred to by Wells Fargo as an “affidavit of correction.”

“Wells Fargo acted unilaterally and without authority. Our suit seeks to undue the wrong they did,” the plaintiff counsel told Law360.

The class action lawsuit argues that these changes damage the titles of the homes tied to the mortgages. This damage, in turn, reduces the homes’ property value and marketability, according to the complaint. These unauthorized changes allegedly constitute a criminal offense under state laws in Michigan, Colorado, California, Florida, Pennsylvania, and possibly other states.

The plaintiffs are asking the court to determine the validity of the affidavits. They hope to receive a ruling that these documents are void and of no effect. They also wish for Wells Fargo to withdraw the documents and for the court to prohibit the institution from filing similar documents in the future.

According to the Tippetts, in 2003, they were told by bank officials during finalization on a $100,000 mortgage agreement that if they applied for a $25,000 home equity loan, they wouldn’t need to pay out-of-pocket for a down payment on their home. By the time the loan documents were finalized, the Tippetts had reportedly agreed to a first mortgage, a second mortgage lien, and a home equity loan secured by the mortgage.

Under the agreements, the Tippetts were allowed to draw from the line of credit relating to the home equity loan until Oct. 9, 2013. Depending on the balance, the repayment period for that loan was allegedly set to reach a maturity date of either October 2028 or October 2043.

However, roughly six months before the maturity date of the home equity loan, the bank allegedly filed an affidavit of correction. 

The affidavit sought to amend the maturity date of the second mortgage from October 2013 to October 2043, according to the class action lawsuit.

The plaintiffs say that this document was filed on April 2, 2013 in Marion County, Fla., where the loan was issued and is still attached to the couple’s Florida home chain of title. The couple says that this change caused them financial harm.

Wells Fargo allegedly failed to notify the couple about the amended maturity date, either before or after it filed the affidavit amending that date.

The Tippetts claim the mortgage lender acted without their consent or consideration. Due to the alleged secrecy with which the affidavits were filed, the couple argues that the statute of limitations in this matter should be tolled.

“No reasonable person would have a reason to review whether Wells Fargo had recorded any instruments, much less fraudulent instruments, regarding their properties,” the Wells Fargo home loan class action lawsuit reads.

“Wells Fargo actively concealed the filings and knowingly and purposefully failed to seek consent and authorization from plaintiffs and the class members.”

The plaintiffs are seeking to establish a nationwide Class of borrowers in similar situations. Class Members include bank customers fitting a few requirements: they must have obtained a home equity line of credit loan; the Well Fargo home loan must allow the customer to access a revolving line of credit that is secured through a second mortgage lien; the second mortgage lien must later be amended by an affidavit of correction meant to change the maturity date or other terms of the mortgage. According to the Tippetts, this Class could include thousands of potential members.

They also hope to establish a subclass of borrowers who obtained loans in Florida in order to seek injunctive relief regarding the allegations that the mortgage lender violated state laws. The Tippetts estimate that there could be hundreds of borrowers who are eligible to join this Class.

The Wells Fargo class action lawsuit also makes note of several other controversies that Wells Fargo has been involved in over the last 10 years. The class action lawsuit describes a variety of deceptive lending practices including instances in which the bank unilaterally modified Wells Fargo home loan repayment terms, or failed to seek authorization before opening sometimes unnecessary accounts on behalf of their customers.

If you received a second Wells Fargo home loan securing a line of credit only to have the bank amend the terms of that loan via an affidavit of correction, comment about your experience below.

The Tippetts and the proposed Class are represented by George Franjola of Law Office of George Franjola, as well as Benjamin J. Widlanski, Rachel Sullivan, and Robert J. Neary of Kozyak Tropin & Throckmorton LLP.

The Wells Fargo Home Loan Class Action Lawsuit is Tippett, et al. v. Wells Fargo Bank NA, Case No. 5:20-cv-00342, in the U.S. District Court for the Middle District of Florida.

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