Wells Fargo Improper Fees in Bankruptcies Class Action

This class action alleges that Wells Fargo Bank improperly charged certain attorneys’ fees related to the personal bankruptcy proceedings of the plaintiffs.

The class for this action includes people who (1) took a mortgage serviced by Wells Fargo Bank for which the agreement contained a clause permitting the note holder, if it required immediate payment in full, to be paid back for costs and expenses in enforcing the note, such as attorneys' fees; and (2) were subsequently charged attorneys’ fees related to a personal bankruptcy. In addition to the nationwide class, there is also a Minnesota subclass.

The defendants in this case include three parties. The first is Wells Fargo Bank, referred to in the complaint as WFB. The other two, Wells Fargo Home Mortgage, Inc. and Wells Fargo Home Mortgage, LLC, are, according to the complaint, for all intents and purposes the same entity, a wholly-owned subsidiary of Wells Fargo & Company. A mortgage loan originator, it is referred to in the complaint as WFHM.

According to the complaint, WFB is a national banking organization that also services residential mortgage loans, either for itself or for another entity, such as WFHM. The services WFB provides include collecting and distributing payments of interest, principal, and other fees and charges related to the mortgages. When WFB acts on behalf of WFHM, a portion of the money collected goes to each of them.

The complaint alleges that WFB unjustly charged attorneys’ fees that it was not entitled to in connection with the plaintiffs’ personal bankruptcies. Although the plaintiffs’ mortgage documents did contain a clause that stated that WFB could charge a fee to defray the costs of foreclosing on their homes, the complaint alleges that the clause stated only that if “the Note holder has required [payment] immediately in full . . . the Note holder will have the right to be paid back . . . for its costs and expenses in enforcing this Note.”

According to the complaint, then, WFB was not entitled to these fees because it did not in fact require immediate payment in full nor attempt to foreclose on their homes. The complaint says that even though WFB took other steps related to the plaintiffs’ personal bankruptcies, it did not incur the foreclosure costs for which it was entitled to be reimbursed.

The complaint alleges that WFB and WFHM are therefore guilty of violating federal and Minnesota laws.

Article Type: Lawsuit
Topic: Consumer
Tags: Adding Unauthorized Fees During Collection, Unlawful Debt Collection, Unlawful Fees, Your Bank