Wells Fargo Co. charged some homebuyers fees to extend promised interest rates when the bank failed to process their mortgage applications on time, ProPublica reported, citing four former employees from the Los Angeles area.
The practice, apparently limited to that region, broke with the company’s policy of eating the fees when it was at fault for delays, the publication said. They typically amount to about $1,000 to $1,500 if deadlines are missed and interest rates have increased, it said.
“We are talking about millions of dollars,” one former employee wrote in a letter sent to members of the U.S. Senate Banking and House Financial Services committees in November, ProPublica said. He never received a reply, it said.
The bank, which faced congressional hearings last year after opening legions of bogus accounts for customers, said in a statement that it’s looking into concerns raised by the publication. Chief Executive Officer Tim Sloan, who took over at the height of the account scandal in October, has vowed to rebuild clients’ trust.
“We are reviewing these questions about the implementation of our mortgage rate-lock extension fee policies,” the San Francisco-based bank said on Jan. 23. “Our goal is always to work efficiently, correctly and in the best interests of our customers and we will do a thorough evaluation to ensure that’s consistently true of the way we manage our rate-lock extensions.”