Wells Fargo accused of falsely overcharging mortgage borrowers


Four former Wells Fargo employees in the Los Angeles region say the account scandal was not the only way the bank deceived borrowers, according to an article in ProPublica by Jesse Eisinger.

According to the article, the bank improperly charged borrowers to extend their promised interest rate when their mortgage paperwork was delayed.

However, the article explained that the delays were usually the bank’s fault but that management forced them to blame the customers, finding a variety of strategies to shift responsibility.

The alleged claim reopens a fresh wound for the bank given that its still cleaning up from its major account scandal announced in September of last year.

In the bank’s latest fourth-quarter earnings report, CEO Tim Sloan said, “We continued to make progress in the fourth quarter in rebuilding the trust of our customers, team members and other key stakeholders.”

From the article:

“I believe the damage done to Wells Fargo mortgage customers in this case is much, much more egregious,” than from the sham accounts, a former Wells Fargo loan officer named Frank Chavez wrote in a November letter to Congress that has not previously been made public. “We are talking about millions of dollars, in just the Los Angeles area alone, which were wrongly paid by borrowers/customers instead of Wells Fargo.” Chavez, a 10-year Wells Fargo veteran, resigned from his job in the Beverly Hills private mortgage group last April. Chavez sent his letter to the Senate banking committee and the House financial services committee in November. He never got a reply.

Wells Fargo provided the following comment to ProPublica on the alleged article:

Wells Fargo spokesman Tom Goyda wrote in an email, “We are reviewing these questions about the implementation of our mortgage rate-lock extension fee policies. 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.” 

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