Our attorneys are investigating allegations that Wells Fargo wrongfully denied federally-required mortgage modifications to borrowers in trouble. Wells Fargo has acknowledged that 870 borrowers were wrongfully denied a modification, but blames the issue on a software error.

Wells Fargo has started sending out notice letters and checks to affected borrowers, but the amount offered may under-compensate for the injuries from a wrongful foreclosure.

Has Wells Fargo mailed you a letter for a wrongful denied loan modification between 2010 & 2018? You may have been affected.

Contact us for a free, confidential consultation.

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1-800-254-9493

Wells Fargo Admits Loan Modification Error, Wrongfully Foreclosed On Homes

A quarterly filing with the Securities & Exchange Commission in August 2018 revealed that Wells Fargo made an “error” in denying mortgage modifications to hundreds of borrowers. The securities filing says that Wells Fargo discovered a “calculation error” in its automated software for calculating whether a borrower should be offered more favorable loan terms in lieu of foreclosure. Wells Fargo says the “error” affected 625 homes that were “in the foreclosure process between April 13, 2010, and October 20, 2015.”

In November 2018, Wells Fargo revised its estimate, announcing that the miscalculation actually affected 874 homes that were going through foreclosure between March 15, 2010, and April 30, 2018.

As Wells Fargo explains, two federal government programs require Wells Fargo and other lenders to offer loan modifications to keep people in their homes when they are in default, rather than going through the expensive process of foreclosure. Wells Fargo did not comply with this law, it says, due to a software glitch that affected 874 mortgages that were in default. Ultimately, 545 homes were foreclosed on, when a mortgage modification should have been offered, according to Wells Fargo’s own disclosures.

Wells Fargo Sends Letters and Checks to Wrongfully Foreclosed Homeowners

Wells Fargo has already sent letters and checks to many individuals who it admits were affected by the loan modification error. The letters typically say that the person was affected by the calculation error, and offers them a check in the range of $10,000 as a gesture of good will. If the person isn’t satisfied with the amount, Wells Fargo generally offers to submit to independent mediation to determine if the person should get more money. Wells Fargo doesn’t make clear that they may have an attorney present during the mediation. Mediators are generally former judges or practicing attorneys.

Many of the individuals who received these letters and checks from Wells Fargo feel that the offered money is not enough to compensate for all the harms that come with foreclosure. Many people lost substantial home equity value when their home was foreclosed on; others suffered adverse life events from having a poor credit rating; and others experienced significant upheaval to their personal lives, including pain and suffering.

Senators Agree: Wells Fargo Not Paying Enough to Repair Damage from Wrongful Foreclosure
Wells Fargo says it has set aside $8 million to remediate the wrongful disclosures caused by the software miscalculation. Split amongst the 545 people Wells Fargo says it wrongfully foreclosed on, that would amount to only about $14,500 per person. But, reportedly, the checks Wells Fargo is sending out are lower than that. Wells Fargo is telling people they can go to mediation if they want more money.

Senator Elizabeth Warren said of Wells Fargo’s “remediation” plan: “Setting aside a few thousand dollars for each of the people affected. Pathetic.” And according to Senator Schatz, who sits on the Senate Banking Committee, Wells Fargo’s remediation plan does not offer near enough to compensate for the “devastating ripple effect” a foreclosure can have, including the “stress and trauma” of losing one’s home, “related health problems,” and “destroy[ing] people’s credit.” Senator Schwartz continued:

“It is hard to imagine how Wells Fargo’s estimate of $8 million for remediation would come close to remunerating impacted customers.”

Wells Fargo Refuses to Tell Borrowers Whether They Are Among Those Wrongfully Foreclosed On

The Charlottesville Observer reports, “Although Wells has announced plans for $8 million in relief for the victims, it said it hasn’t contacted them yet or said when it will do so.”

The Observer continues that “[a]fter Wells Fargo[’s] error, frustrated customers wonder: Did it cost me my home?”

Some individuals who have contacted Wells Fargo to see if they have been affected, and those that were sent notice letters and checks, were assigned a Wells Fargo Home Preservation Representative to answer their questions. The answers these individuals appear to provide are limited.

Our Team

Eric Gibbs

A founding partner at the firm, Eric has negotiated groundbreaking settlements that resulted in reforms to business practices, and have favorably shaped the laws impacting plaintiffs’ legal rights.

Dylan Hughes

Dylan Hughes concentrates his practice on investigating and prosecuting fraud matters on behalf of whistleblowers, consumers and employees harmed by corporate misconduct.

David Stein

David Stein focuses his practice on consumer protection and financial fraud. He has written and spoken for the American Association for Justice, Consumer Attorneys of California, and others.

Michael Schrag

Michael Schrag has nearly 20 years of experience representing individual and small business plaintiffs in a broad range of complex class actions against large corporations.

Gibbs Law Group Financial Fraud Experience

Gibbs’ Law Group financial fraud and securities lawyers have more than two decades of experience prosecuting fraud. Our attorneys have successfully litigated against some of the largest companies in the United States, and we have recovered more than a billion dollars on our clients’ behalf.

We have fought some of the most complex cases brought under federal and state laws nationwide, and our attorneys have been recognized with numerous awards and honors for their accomplishments, including Top 100 Super Lawyers in Northern California, Top Plaintiff Lawyers in California, The Best Lawyers in America, and rated AV Preeminent (among the highest class of attorneys for professional ethics and legal skills).

 

About Us

Gibbs Law Group is a national law firm committed to protecting the rights of our clients who have been harmed by corporate misconduct. We represent individuals, whistleblowers, employees and small businesses across the U.S. against the world’s largest corporations. Our award-winning lawyers have achieved landmark recoveries and over a billion dollars for our clients in high-stakes cases involving securities and pharmaceutical fraudfalse advertisingprivacypersonal injuries, and employment law violations.

Wells Fargo Wrongfully Foreclose On Your Home?

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