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Wells Fargo Bank mortgage holders whose loan modifications were pending with the bank found themselves being billed late fees, or undergoing foreclosure proceedings, in violation of California consumer laws, according to a class action lawsuit removed to California federal court Thursday.
The plaintiffs, led by Henry and Renee Garcia, filed the Wells Fargo mortgage class action lawsuit based on the California Homeowner Bill of Rights, which has resulted in multiple class action lawsuits since it was enacted on Jan. 1, 2013.
According to California’s new homeowner regulations, mortgage holders are prevented from so-called “dual tracking”: “advancing the foreclosure process if the homeowner is working on securing a loan modification.” This can include charging late fees, filing for foreclosure, and other foreclosure actions.
The Wells Fargo class action lawsuit describes the dual tracking process as it applies to the plaintiffs. “Dual tracking occurs when servicers process both a foreclosure and a loan modification at the same time,” the class action states. “Short term repayment plans, such as trial modifications, are very attractive to servicers, as they require little to no underwriting, they do not require the servicer to recognize any long-term loss… However, the foreclosure incentives discussed above encourage servicers to proceed along a dual track, as their primary goal is foreclosure, not modification.”
The plaintiffs allege that Wells Fargo and other servicers are eager to pursue foreclosures because “they can make more money by foreclosing on a home than by modifying a loan on that home.”
A number of loan modification class action lawsuits have been filed over the practice of dual tracking in the past few years since state and federal agencies began to crack down on financial institutions.
The Wells Fargo loan modification class action lawsuit was originally filed by the Garcias, San Juan Capistrano, Calif. homeowners, in state court March 5 but removed to federal court on April 10.
The Garcias claimed that, on March 6, 2013, Wells Fargo recorded a notice of default on the property they owned. The Garcias submitted a loan modification application on April 15, 2013, and over the next several months the Garcias were in frequent communication with a Wells Fargo “home preservation specialist,” and responded to all documentation requests in a timely manner. However, Wells Fargo charged the plaintiffs $840 in late fees and made preparations to foreclose on the property while the Garcias were still engaged in the application process.
The Garcias’ application process went on through January 2014, when Wells Fargo denied the Garcias’ application, according to the class action lawsuit. The plaintiffs appealed, but the bank denied the appeal in February and scheduled a trustee sale of the property for March 5.
The Wells Fargo class action lawsuit seeks to represent two classes. The first is all California homeowners who applied for a loan modification with Wells Fargo, on or after Jan. 1, 2013, and received a notice of default, notice of trustee sale, and/or trustee’s deed upon sale while their loan modification was still pending. The second class includes California homeowners who, on or after Jan. 1, 2013, paid Wells Fargo late fees during periods when a complete first lien loan modification was being considered or a denial was being appealed, while a homeowner was making loan modification payments, or while another foreclosure alternative was being evaluated or exercised.
The Garcias are seeking damages, injunctive relief, and attorneys’ fees and expenses.
Henry and Renee Garcia are represented by class action lawyers Vincent D. Howard and Gregory H.D. Alumit of Howard Law PC and David M. Arbogast of Arbogast Bowen LLP.
The Wells Fargo Loan Modification Class Action Lawsuit case is Garcia et al. v. Wells Fargo Bank NA et al., Case No. 8:14-cv-00558, in U.S. District Court for the Central District of California.
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9 thoughts onWells Fargo Class Action Lawsuit Targets Rushed Foreclosures, Late Fees
Was sent a letter of foreclosure but Wells Fargo kept accepting my mortgage payment on schedule. We had not been late for ober a year. When we called to request a loan mod they said not to pay attention to the foreclosure docs since they were still applying my mortgage payments. Finally found auction docs on my doorstep with excessive late fees. A friend saw my property up for auction in the newspaper and asked me about it. A rude appraiser showed up unannouncedand conducted an appraisel while Real Estate agents were stopping by inquiring about the property. I hired an attorney to help but he ran off with my $1500 and wouldn’t answer my calls. Wells Fargo added over 10K to my mortgage by the time the loan modification was approved. Damn thieves!
Wells Fargo actually took over 9 months of Modification money from us in 2009-2010. Sent foreclosure documentation after recieving thousands of dollars from us and dragging out the modification process. Added numerous fees through the process. Kept having us fill out Modifications and raising the amounts. Also had there Attorney lie in a court of law during a mediation process, then in a law suit lied about what they had received from us here in Cuyahoga County court. The Court let them get away with it. We have filed a complaint with the Counsumer Financial Protection Bureau, and a Senator in the State of Ohio. Wells Fargo is still trying to play these games with us, regarding Modifications. They received over $10,000 dollars from us after filing for Bankruptcy to protect our home. Cuyahoga County spread out that process for over 5 months then gave Wells Fargo all of our money from the Trust it was in. They did not even apply it to the principle of the loan. Our Mortgage has been complete profit, and our Mortgage has not gone down a dime in 5 years after receiving all that money. I would like to have a Class Action here in Ohio.
How can i join this lawsuit they sold mysisters house while she was still in it while waiting for the loan modification to be approved
I am in the process of the Wells Fargo home modifacation program.
WF has added thousands of dollars in late fees to my account during the application process.
I
what recourse would I have if this happened to us but before 2013, it began in 2010 and ended with us having to have filed bankruptcy and finally a modification on our 1st mortg. in 2012. wells said they could not look into modifying the 2nd (which was an equity loan with them) until the 1st was completed. All along they continued to add late fees to the 2nd. I know we have been taken for so much money but I don’t understand so much of the legal language.
pls advise if possible.
We were in the same situation in Tennessee , went thru the loan modification for over a year. Ended up with a set payment that was almost as much as before the process started. They added over 10,000 to the back of our loan. They are really a rip off !!!!!!!!!!!!
we went thru the same thing here in Illinois, we were working on modification and they Wells fargo kept racking up fees even though we were making the payments according to arrangements. finally went thru, but left with a load of fees added to our loan.
Pat sounds like time for another lawsuit in your state & all others that apply… time them to experience what they have done to people…
Hello. We live in Illinois, too. We ended up with a ton of fees and months of past due mortgage payments added to our principal balance when we got our loan modification. They kept telling us we were in the review process, yet tried to foreclose on the home. Can we start a class action suit in Illinois?