We, along with Gibbs Law Group in Oakland, California, filed a class action lawsuit against Wells Fargo Home Mortgage for wrongfully denying mortgage modifications to homeowners in need.
The Complaint can be read HERE.
Between September and October 2018, Wells Fargo sent letters to approximately 870 customers who had applied for a mortgage modification between April 13, 2010 and April 2018 but were denied a modification. Wells Fargo has admitted that these homeowners were wrongful denied a modification due to a software “glitch” with Wells Fargo’s internal system.
Of the 870 homeowners who were wrongful denied a mortgage modification, at least 545 of them lost their homes as a result.
As founding partner Rick Paul explained, “Wells Fargo must be held accountable for the harm and anxiety it has needlessly caused borrowers and their families.”
Wells Fargo has further admitted that its investigation is not complete, and more borrowers may have been affected.
For those first 870 homeowners Wells Fargo has identified, it mailed a letter explaining the “glitch” along with a check to compensate for the mistake. In many, if not all, instances, the amount offered does not fully compensate the homeowner for the wrongful denial of the mortgage modification and/or foreclosure on the home.
In an effort to “make amends,” Wells Fargo has set aside only $8 million compensate homeowners for the wrongful denials caused by the software miscalculation. Dividing the total $8 million between 870 homeowners amounts to only $9,195 each (an average). Wells Fargo has not said how they determined how much each affected homeowner is receiving or whether those whose homes were foreclosed on received more than those who were denied a modification but not foreclosed on.
Elected officials have condemned Wells Fargo’s delay and response to its critical failure. Although the “glitch” was discovered and allegedly corrected in 2015, Wells Fargo did not publicly admit or notify homeowners of the error until August 2018—3 years later. 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.”
You can read the full letter from Mr. Schatz HERE
If you believe you were denied a home mortgage modification by Wells Fargo between April 2010 and April 2018, please contact us to learn more. You can email us at info@PaulLLP.com or call us toll free at 855-984-8100.