Wells Fargo is in the middle of another scandal involving its business practices. According to the bank, it will reach out to 110,000 customers who might have been charged improper “rate-lock extension fees” while finalizing their mortgage paperwork. Wells Fargo will issue refunds to some of these customers. Rate-lock extension fees are what borrowers pay if they miss their mortgage paperwork deadline but still want to keep their quoted interest rate. However, borrowers are only supposed to be charged these fees if they are responsible for missing the deadline. It turns out that Wells Fargo was responsible for the late paperwork filings in some of these cases.
Rate-lock extension fees can be costly for borrowers with expensive mortgages. According to Wells Fargo, it assessed $98 million in rate-lock fees for 110,000 customers between September 2013 and February 2017. The bank believes it will issue less than $98 million in refunds because some of the fees were appropriately assessed or already refunded.
Former Wells Fargo employees have also discussed this scandal with financial regulators. Earlier this year, a Wells Fargo mortgage banker claimed he was fired for blowing the whistle on this scandal. He claims the bank had falsified records to charge these rate-lock fees. After being fired, he filed a wrongful termination lawsuit against Wells Fargo, alleging his employer is guilty of retaliation. Last year, four Wells Fargo employees sent a letter to Congress that claimed the bank had improperly assessed these fees even in cases where it was at fault for delayed paperwork filings.
Wells Fargo is also facing a class-action lawsuit for its rate-lock fee scandal. The Consumer Financial Protection Bureau (CFPB) has launched an investigation into the matter.
Do I Need a New Jersey Real Estate Attorney for Mortgage Issues?
Some lenders may use deceptive or predatory business practices to issue improper fees. In such cases, you need an experienced attorney that can protect your rights. The New Jersey real estate attorneys at Garland & Mason, L.L.C could potentially help you resolve issues with residential real estate transactions.