Follow us on Twitter and Facebook for the latest Class Action Settlement News!

Chase, Wells Fargo Mortgage Fee Abuse Class Action Lawsuit

By Sarah Pierce

 

Wells FargoWells FargChaseo and JPMorgan Chase have been hit with a class action lawsuit alleging that the two lending giants cheated hundreds of thousands of borrowers who were late on mortgage payments by charging excessive and abusive default fees.

The class action lawsuit claims Wells Fargo and Chase charged homeowners over-inflated fees once they began to fall behind in their mortgage payments, sometimes by as much as 300 percent. Together, the two lenders service approximately 25 percent of all U.S. mortgages, which means they may have potentially defaulted borrowers out of a billion dollars or more, attorneys for the Class estimate.

“Loan agreements require that default-related services must be reasonable and appropriate,” said an attorney representing the Class. “Banks are not allowed to mark up the charges so they can make a profit, but that is exactly what they have done.”

The amount of the inflated or unnecessary charges the banks charge can very, running as low as $20 to as much as $135, the class action lawsuit says. The fees are charged when a borrower is late on a payment, and the bank’s computer programs begin the default process by levying fees against the borrower.

In addition to charging unnecessary and marked-up fees, the class action lawsuit says the banks concealed the fees through “cryptic wording.” These fees are typically listed on a borrower’s monthly statement as “other charges,” “miscellaneous charges” or “corporate advances” in an attempt to hide the true nature of the charges, the class action lawsuit says.

According to the class action lawsuit, one of these fees the banks charge is used to hire a real estate broker to assess the value of the home based on similar properties. The real estate agent’s assessment is called the broker’s price opinion (BPO) and is used to help the lender price the property for foreclosure.

Federal law allows lenders to charge these BPO fees, but they are not allowed to mark up the charges or perform unnecessary services and make a profit, which is what Wells Fargo and Chase have done, according to the suit.

“Our investigation has revealed that as a result of these practices, banks often make more money from loans that are in default than loans that are current,” a Class attorney said. “Loan agreements require that default-related services must be reasonable and appropriate.”

The Wells Fargo and Chase RICO class action lawsuit is brought on behalf of all U.S. residents who had a loan serviced by Wells Fargo or Chase and whose accounts were assessed fees for default-related services, including Broker’s Price Opinions, and inspection fees, at any time, continuing through the date of final disposition of this action.

The case is Latara Bias, et al., v. Wells Fargo & Company, JPMorgan Chase & Co., et al., Case No. 12-cv-0664, U.S. District Court, Northern District of California.

 

We tell you about cash you can claim EVERY WEEK! Sign up for our free newsletter.

 

Updated February 27th, 2012

 

All class action and lawsuit news updates are listed in the Lawsuit News section of Top Class Actions

LEGAL INFORMATION IS NOT LEGAL ADVICE
Top Class Actions Legal Statement
©2008 – 2010 Top Class Actions® LLC
Various Trademarks held by their respective owners.

7 Comments

  • Anonymous February 28, 2012

    I will most likely be included in this class action suit. I just wish this suit also included situations where the lender (in my case, Wells Fargo), purposely HELD 2 full monthly mortgage payments (totaling over $2800 including late fees) that we had sent (albeit, late). When we called them on it, they claimed those 2 payments were put in a “suspension account,” forcing us to remain delinquent. We’ve since have had no choice but to move out of the house and let them foreclose on us.

  • Anonymous March 14, 2012

    How do you become involved in the lawsuit?

  • Anonymous March 18, 2012

    Wells Fargo. Aka hells fargo. Let my payment sit as unapplied funds for being the wrong amount…which is the amount the asked for… my payment changed for no reason. I called and asked why they couldn’t explain …..aI payed what was on the billhead. They didn’t apply it to my loan I have late fees on it. Ect

  • Anonymous April 3, 2012

    I am going through all the above plus MORE! They lied about reaffirmation agreement when I suffered a financial loss. They doubled late fees on motions to the US Courts! They took late fees; inspection fees listed as other charges and would not answer my questions as to what these charges were for. They took attorneys fees first and my account was always put into suspension! They stated I owed over $1400 in corporate fees! Please I want in on a class action lawsuit. I was also advised to file a civil lawsuit against them for their fraudulent actions and to take action against “STEPHEN BAUM ‘s office for NOT completing the reaffirmation”
    This company has ruined my life! My credit!
    any information would be welcomed!

  • Anonymous May 14, 2012

    I’m dealing with the same thing…they have over $4,000 in an account being held and not applied to the loan. I ask questions but Wells Fargo can’t answer them. I call the attorney and they indicate I haven’t paid since January of this year (which is FALSE) no wonder I’m in “delinquent” status!!! When really I’m only a month and a half late.

  • SickOfWellsFargo February 22, 2014

    Please add me to this lawsuit

  • Brenda Jenkins July 15, 2014

    I too have lost my home due to Chase and Wells Fargo wrongfully foreclosed after I requested a loan modification due to my not working. I am interested in the class action law suit.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

View all: