Wells Fargo agrees to pay $50 million for overcharging homeowners in default

by Ryan Smith31 Oct 2016
Wells Fargo will pay $50 million to settle a racketeering lawsuit that alleges the bank overcharged hundreds of thousands of homeowners for appraisals after they defaulted on their loans, according to a Reuters report.

If approved by the court, the settlement will resolve claims that the bank charged much more than it paid for third-party appraisals, Reuters reported. The lawsuit charged that by overcharging borrowers, Wells Fargo drove them even further into default. About 250,000 homeowners were covered in the proposed settlement.

Banks are allowed to charge homeowners for appraisals if they default on their mortgages. however, the lawsuit, filed in 2012, alleged that Wells Fargo tacked big markups onto the prices charged by third-party vendors. While the typical cost to Wells Fargo was around $50, the bank would charge borrowers $95 to $125, the suit alleged. Customers often didn’t know they’d been overcharged because the charges appeared on statements under vague headings such as “other charges,” Reuters reported.

The lawsuit maintained that sending statements with fraudulently concealed fees amounted to racketeering. Wells Fargo called the claims “far-fetched.” Bank spokesman Tom Goyda said that the bank felt its appraisal practices were legitimate, but decided to settle the suit to avoid further litigation.

The settlement comes on the heels of a scandal over Wells Fargo’s practice of opening customer accounts without authorization. Multiple lawsuits are pending over that practice, Reuters reported.
 

COMMENTS

  • by | 10/31/2016 4:57:25 PM

    Far fetched but- here $50,000,000.00 LOL

  • by vlj | 10/31/2016 5:04:49 PM

    Wells Fargo is as scummy as they get ... the list of infractions against customers will be a very long laundry list. Of course how pathetically low the fines are .. 50 mill is nothing for them ... the whole crooked corporation needs to be shut down and burned.

  • by gjh | 10/31/2016 5:19:45 PM

    Couldn't agree more. Remember barney Frank gets a piece of the AMC business. Dianne Feinstein's husband got the contract from OBAMA to liquidate the Post Offices and no bids were ever taken. Any thoughts on the commissions?? Now Warren conveniently has law firm contributions made to her? Hillary of course should be indicted and the group locked up for lying to the FBI.(just for starters). Wasn't it that Washington was supposed to be our public servants not the other way around?

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