You may be wondering if Wells Fargo is a target of loan modification lawsuits. In this article, we’ll discuss the issues surrounding Wells Fargo, Bank of America, JP Morgan Chase, and Ally Financial. These banks all face lawsuits that stem from mortgage mismanagement. Here’s why. Wells Fargo stands to profit from your loan modifications. Every loan they modify earns them around $1,600 in government programs. But when these changes were submitted to the lenders without approval, they are risking federal scrutiny and court sanctions. And when challenged by lawyers, they reverted the changes.
A New York attorney general recently filed a lawsuit against Wells Fargo, alleging that the bank violated a 2012 settlement by failing to acknowledge mortgage modification applications. In the lawsuit, Wells Fargo denied the application of one woman because of a faulty calculation. The lender issued a $24,700 check to compensate the plaintiff for her loss of home, but that wasn’t enough to cover the costs of the modification.
During these lawsuits, well-known consumer advocates are fighting to ensure that the bank follows the law. These lawsuits, filed in seven states, have revealed the practice of banks making unauthorized changes to loans. While the company has denied wrongdoing, it has admitted to making these changes without approval, despite the risks of federal and court scrutiny. Despite the lawsuits, Wells Fargo has reversed the changes in some cases and has faced scrutiny from the government and the courts.
Bank of America
Recently, Wells Fargo agreed to settle a class action lawsuit over the company’s failure to offer trial loan modifications to some homeowners. The bank publicly acknowledged its mistake and sent out letters and checks to those affected, but disputed any further liability for the erroneous calculation. In addition to the settlement, the bank will pay out up to $9,098,907 to class members and will reimburse attorneys’ fees up to $2719,093 in litigation expenses.
As part of its settlement, five of the nation’s largest banks reached an agreement with 49 states to combat allegations of wrongdoing with mortgage modifications. The agreement contained 304 rules requiring banks to properly handle complaints. Banks Fargo and Bank of America declined to comment on the lawsuits. As of this writing, the settlement does not include any fines, but the banks may face additional legal action, including the possibility of being required to pay restitution.
JP Morgan Chase
In Wells Fargo Loan Modification Lawsuit against JP Morgan Chase, plaintiffs allege that Chase violated their statutory rights and engaged in sharp dealing. Plaintiffs claim that Chase instructed them to stop making their mortgage payments, falsely promising that their nonpayment would not hurt their credit scores. Chase also allegedly mislead plaintiffs, retaining employees with insufficient training, and implementing a telephone routing system that prevented them from speaking with the same service representative over the phone.
The Bank argues that the Carrington case was systemic and that the modification without proper formalities was widely used. It is important to note that modifications without proper formalities are ubiquitous. Many assume they are valid and are accepted. The Bank argues that allowing these modifications would benefit undeserving borrowers. In other words, if the Texas Supreme Court would forbid them, borrowers would receive undeserved and unequal benefits.
The Ally Financial vs Wells Fargo lawsuit is the latest example of how the government can force large banks to do more to protect homeowners from fraud. The bank has repeatedly denied requests for modifications, while at the same time failing to keep promises that they made to borrowers. One example is a $2 figure that appeared on a pay stub and was never explained to the borrower. The plaintiffs argue that the company’s failure to fulfill its commitments to borrowers resulted in a sham modification.
In 2011, the government and five large banks settled claims filed by homeowners in the US. The settlement, totaling over $50 billion, includes direct payments to distressed borrowers, the federal government, and servicemembers who were wrongfully foreclosed or charged higher interest rates. Similar settlements have been reached with HSBC, Ocwen, and Suntrust. The settlements are part of the ongoing investigation into mortgage lending practices.
This Citigroup vs Wells Fargo loan modification lawsuit was filed in California by a homeowner named Amira Jackmon and others who were similarly positioned. The lawsuit claims that Wells Fargo failed to recognize and correct errors in its automated system, which was used to process the loan modification. The plaintiffs argue that this behavior is unconscionable and Wells Fargo must pay punitive damages to the homeowners.
The settlement requires the banks to acknowledge the receipt of a loan modification application, notify borrowers if they are missing any documents, and make a decision on a complete modification application within thirty days. According to the suit, Wells Fargo failed to meet these standards, and they subsequently foreclosed on or sold the plaintiffs’ homes. But there’s a silver lining to this case: the New York Attorney General’s Office has already sued Wells Fargo for violating loan modification laws.