Wells Fargo Accused of Selling Predatory Mortgages
Wells Fargo is facing a new lawsuit. The financial giant and a group of affiliated mortgage lenders are accused of using deceptive tactics to push customers into a “complicated, risky and expensive” mortgages so they could sell as many loans as possible to third party investors. This was allegedly done even though the bank knew that customers would likely default on their mortgages.
This Wells Fargo lawsuit was filed by Oakland resident John H. Ellis. It also includes Wachovia Mortgage, FSB, Golden West Savings Association and Mortgage Electronic Registrations Systems, Inc (MERS).
Ellis says that he and tens of thousands of other borrowers were coaxed into adjustable rate mortgages. The lawsuit alleges that these mortgages were “technically engineered” to end in default, foreclosure, and eviction. They were designed to “systematically and dramatically increase monthly payments to the extent that the payment terms, conditions and provisions extended far beyond affordability,” the lawsuit says.
Ellis is suing Wells Fargo for fraudulent concealment, originating falsified documents and foreclosing on homeowners in the Federal Making Home Affordable Plan. He’s seeking restitution and damages of between $3.75 million and $6.25 million, plus interest, fees and costs.
Wells Fargo already reached a $18.5 million settlement last month with mortgage customers who lost their homes due to banking. A previous lawsuit also accuses the bank of running a fraudulent mortgage servicing scheme, where it collected illegal fees for property inspections, resulting in bankrupted homeowners.
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Time and time again we hear these stories but ultimately it comes down to people not reading contracts they sign. Mortgage terms are spelled out very clearly in the financing documents. Banks are not the ones who took out these mortgages. Banks are forced to give out loans to underqualified applicants due to the community lending act. No surprise, they are more likely to fail in their repayments and more likely to have to pay higher interest rates or have tougher terms due to them being under qualified in the first place. It’s like credit cards with those who have the worst credit having the highest interest to account for their risk of default. Unfortunately, we live in a country where lawyers can get rubber stamp juries and judges to go along anytime a bank or business is accused of discrimination. If conservatives were more aware that all institutions are corrupted, they would pursue a different path than simply tell us to follow corrupted laws and orders made by our adversaries.
Wells Fargo had problems with greedy and criminal managers who took advantage of lax enforcement. That is 6 years in the past. Wells isn’t of great use to those in this miles and points community as they have tough standards, lower bonuses, and they don’t have the goals of cross selling mortgages/brokerage/loan products/deposits like the other big banks with money to break even on premium cards with 80,000 bonuses. Good for shareholders that they have had a good comeback this year. With the asset cap in place and its reputation tainted, I wouldn’t mind a split up into 2 or 3 smaller banks.
Sounds a lot like 2008. I’d be disappointed but not surprised if WF hadn’t learned their lesson. I stopped banking with them years ago. Horrid card offerings.
You ever looked at their stock ticker? Makes no sense how this firm is still allowed to operate in the US.
Wells Fargo has shown time and time again that they will always screw their customers for even a single dollar of profit.
After all the bad hijinx from WF, I do not know why anyone would do business with them. I sure wouldn’t. In fact, the only dealings I have with them is a fee-free credit card they sent out to me years ago that I *never* asked for. Turns out I was one of millions who they did this to. I kept it though and it gets $4 spend a month to stay alive for age of credit. Otherwise, I won’t touch them guys with a ten foot pole!