Wells Fargo Scandal May Have Hurt Consumer's Credit Scores

A class action lawsuit alleges in the Wells Fargo mortgage business put through unauthorized changes to home loans held by customers in bankruptcy.

A lawyer in Brownsville, Tex., who represents some of the plaintiffs, said he first thought that Wells Fargo had made a clerical error. Then he saw another case and realized that it was pattern of filing false documents with the federal court.

The big take away on this story is that seemingly harmless clerical errors in documents related to consumer finance may actually be evidence of a violation of the law. This can make all the difference in something as important as your home, your mortgage, or any kind of loan when facing a loan default or foreclosure.

Senior Partner Joshua Denbeaux trains and coaches lawyers at Denbeaux and Denbeaux to recognize the errors and patterns of practice by banks, debt collectors and loan servicing companies that violate laws such as the Fair Debt Collection Practices Act, (FDCPA), the Fair Credit Reporting Act (FCRA), the Truth in Lending Act (TILA), the Real Estate Settlement Procedures Act (RESPA) and the Consumer Fraud Act.

First consultations are done personally by Josh Denbeaux so that errors are spotted and violations are exposed that may violate your rights that protect your home, your credit and your money.

If you are having any kind of problem related to financial consumer rights, such as being late on payments on a home mortgage and heading for default, call us now to schedule a no-charge free consultation at (201) 664-8855.

In the consultation you will get three things:

  1. a comprehensive review of your unique situation.
  2. knowledge of what will happen if you decide to take further action (or not).
  3. an opinion of whether your desired outcome is within reach.

Past clients have expressed a feeling of relief and a tremendous burden been lifted after meeting with Josh. You will have the confidence gained by having the certainty of what will happen next.

The story:

NTY Wells Fargo Is Accused of Making Improper Changes to Mortgages

By GRETCHEN MORGENSON JUNE 14, 2017

Even as Wells Fargo was reeling from a major scandal in its consumer bank last year, officials in the company’s mortgage business were putting through unauthorized changes to home loans held by customers in bankruptcy, a new class action and other lawsuits contend.

The changes, which surprised the customers, typically lowered their monthly loan payments, which would seem to benefit borrowers, particularly those in bankruptcy. But deep in the details was this fact: Wells Fargo’s changes would extend the terms of borrowers’ loans by decades, meaning they would have monthly payments for far longer and would ultimately owe the bank much more.

Any change to a payment plan for a person in bankruptcy is subject to approval by the court and the other parties involved. But Wells Fargo put through big changes to the home loans without such approval, according to the lawsuits. The changes are part of a trial loan modification process from Wells Fargo. But they put borrowers in bankruptcy at risk of defaulting on the commitments they have made to the courts, and could make them vulnerable to foreclosure in the future.

A spokesman for Wells Fargo, Tom Goyda, said the bank strongly denied the claims made in the lawsuits and particularly disputed how the complaints characterized the bank’s actions. Wells Fargo contends that the borrowers and the bankruptcy courts were notified.

“Modifications help customers stay in their homes when they encounter financial challenges,” Mr. Goyda said, “and we have used them to help more than one million families since the beginning of 2009.”

According to court documents, Wells Fargo has been putting through unrequested changes to borrowers’ loans since 2015. During this period, the bank was under attack for its practice of opening unwanted bank and credit card accounts for customers to meet sales quotas.

Outrage over that activity — which the bank admitted in September 2016, when it was fined $185 million — cost John G. Stumpf, its former chief executive, his job and damaged the bank’s reputation.

It is unclear how many unsolicited loan changes Wells Fargo has put through nationwide, but seven cases describing the conduct have recently arisen in Louisiana, New Jersey, North Carolina, Pennsylvania and Texas. In the North Carolina court, Wells Fargo produced records showing it had submitted changes on at least 25 borrowers’ loans since 2015.

 

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