Wells Fargo Mortgage Forbearance Enrollment Without Consent Class Action

In an earlier scandal, Wells Fargo was caught opening credit card and other accounts for clients without their knowledge or permission. The complaint for this class action alleges that Wells Fargo & Company and Wells Fargo Bank, NA have now enrolled some mortgage customers in Covid-19-related forbearance programs without their knowledge or permission.

The Nationwide Class for this action is all persons with a mortgage serviced by Wells Fargo where the mortgage was placed into Wells Fargo’s Covid-19 mortgage forbearance program without their request or where the term of forbearance was extended without the request of the homeowner. A similar California Class has also been defined, for persons with California addresses.

The mortgage forbearance program was part of the Coronavirus Aid, Relief and Economic Security (CARES) Act. The CARES Act was designed to alleviate some of the hardship brought about by measures required to prevent the spread of Covid-19.

Among other things, the Act required that mortgagees and mortgage servicers design mortgage forbearance provisions for federally-backed mortgages. These include mortgages serviced by Wells Fargo on behalf of government-sponsored enterprises (GSEs) like Ginnie Mae, Fannie Mae, and Freddie Mac.

The program requires the consent of mortgage borrowers. The complaint quotes the Consumer Financial Protection Bureau (CFPB) as saying that when a mortgage company receives a request for forbearance, it must provide that forbearance “with no additional documentation required other than the borrower’s attestation to a financial hardship caused by the Covid-19 emergency[.]”

According to the complaint, this means that the attestation is required. However, it claims, “Wells Fargo unilaterally and without consent, and certainly without requesting or receiving any financial hardship attestation, opted unwitting clients into its Covid-19 mortgage forbearance program.” It further claims that the company also “put through secondary requests for forbearance on behalf of homeowners who had asked to participate in the program initially but who did not ask for extensions and no longer wanted to be in the forbearance program.”

The complaint alleges that Wells Fargo has deferred some 2.5 million mortgage payments.

As the complaint points out, “mortgage forbearance has serious consequences for homeowners, including an inability to obtain additional credit and/or to refinance any existing loans.”

“Interest rates are at all-time lows and many homeowners are seeking to take advantage of these historically low rates by refinancing[,]” the complaint says. But “if an account is placed into a forbearance program, those borrowers cannot typically refinance for many months, if not years, even after bringing the account current.”

Wells Fargo has responded to a letter from certain senators seeking further information by saying, among other things, “In the spirit of providing assistance, [Wells Fargo] may have misinterpreted customers’ intentions in a small number of cases.” The complaint notes that this is not a denial.

Article Type: Lawsuit
Topic: Loans

Most Recent Case Event

Wells Fargo Mortgage Forbearance Enrollment Without Consent Complaint

August 29, 2020

In an earlier scandal, Wells Fargo was caught opening credit card and other accounts for clients without their knowledge or permission. The complaint for this class action alleges that Wells Fargo & Company and Wells Fargo Bank, NA have now enrolled some mortgage customers in Covid-19-related forbearance programs without their knowledge or permission.

Wells Fargo Mortgage Forbearance Enrollment Without Consent Complaint

Case Event History

Wells Fargo Mortgage Forbearance Enrollment Without Consent Complaint

August 29, 2020

In an earlier scandal, Wells Fargo was caught opening credit card and other accounts for clients without their knowledge or permission. The complaint for this class action alleges that Wells Fargo & Company and Wells Fargo Bank, NA have now enrolled some mortgage customers in Covid-19-related forbearance programs without their knowledge or permission.

Wells Fargo Mortgage Forbearance Enrollment Without Consent Complaint
Tags: Enrolling Consumer in Service Without Consent, Mortgage or Loan Modifications, Mortgage-Related Unfair Practices, Servicing Your Mortgage