Our attorneys are investigating reports that Wells Fargo purposely causes customers to miss their mortgage application deadline so that the bank can charge them a fee to lock in their lower interest rates. We may file a class action lawsuit on behalf of Wells Fargo customers.
Delayed and then charged by Wells Fargo?
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Whistleblower: Wells Fargo Intentionally Delayed To Deny Borrowers the Locked-In Interest Rate
When you apply for a mortgage, a loan officer fills out a loan application for the customer. As part of the loan application, the customer must provide certain documentation, such as tax returns, bank statements, and property title. The loan officer sends the completed application to the underwriting department for review. While this process is occurring, the bank will lock-in the applicant’s interest rate. If, however, the applicant misses the application deadline, they are required to pay a fee (of between $1,000 and $1,500) to keep their locked-in rate.
Former Wells Fargo employees say that managers instructed them to purposely hinder customers’ applications so they would miss the deadline and be forced to pay the lock-in fee. One tactic employees used was to flag documents as missing that the customer had already provided. For example, a customer may have already provided her tax returns, but the employee would flag the tax returns as “missing,” and force the customer to re-file them.
One former Wells Fargo loan officer stated that the bogus lock-in fees were “much, much more egregious” than the sham accounts that already got Wells Fargo into trouble, where employees were taking out new accounts in customers’ names, without their consent, to collect the account fees.
In the beginning of June, the Consumer Financial Protection Bureau (CFPB) began investigating Wells Fargo for improperly charging lock-in fees for delays that were not customers’ fault.
Wells Fargo is also conducting its own internal investigation of the improper mortgage fees. In the beginning of June, the company fired three high-level mortgage executives. ProPublica reports that these firings signal the “escalating scope and seriousness” of the allegations regarding the company’s invalid lock-in fees.
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Our attorneys fight for consumers and have a proven track record against banks who violate the trust of their customers. After Chase more than doubled minimum monthly payments on loan balances for customers who had accepted its fixed-rate balance transfer offers, Eric Gibbs was appointed as interim class counsel on the Plaintiffs’ Executive Committee representing Chase customers and helped achieve a $100 million settlement on their behalf. We also achieved a $105 million cash settlement for customers of Providian- then one of the largest all-cash settlements reached on behalf of credit card holders for unfair marketing and billing practices.
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