Wells fargo foreclosure manual lawsuit

The class action lawsuit we filed alleges that Wells Fargo failed to implement and maintain the proper software and protocols to correctly determine whether a mortgage modification was required under federal regulations. The lawsuit also alleges that Wells Fargo knew of the error in but failed to disclose it for nearly three years. And that as a result, hundreds of borrowers suffered grave consequences of the improper denials, including wrongful foreclosures, serious damage to their credit, and other harmful effects.

The complaint concludes that Wells Fargo acted negligently in denying loan modifications to hundreds of borrowers, at a time they were struggling, and failed to uphold its duty under the Home Affordable Housing Program HAMP to issue modifications to all troubled homeowners who qualified.

In November , Wells Fargo revised its estimate, announcing that the miscalculation actually affected homes that were going through foreclosure between March 15, , and April 30, As Wells Fargo explains, two federal government programs require Wells Fargo and other lenders to offer loan modifications to keep people in their homes when they are in default, rather than going through the expensive process of foreclosure. Wells Fargo did not comply with this law, it says, due to a software glitch that affected mortgages that were in default.

Wells Fargo has already sent letters and checks to many individuals who it admits were affected by the loan modification error. Mediators are generally former judges or practicing attorneys. Many of the individuals who received these letters and checks from Wells Fargo feel that the offered money is not enough to compensate for all the harms that come with foreclosure. Many people lost substantial home equity value when their home was foreclosed on; others suffered adverse life events from having a poor credit rating; and others experienced significant upheaval to their personal lives, including pain and suffering.

But, reportedly, the checks Wells Fargo is sending out are lower than that. Wells Fargo is telling people they can go to mediation if they want more money.

Some individuals who have contacted Wells Fargo to see if they have been affected, and those that were sent notice letters and checks, were assigned a Wells Fargo Home Preservation Representative to answer their questions.

Tirelli said she has long suspected Wells Fargo of manufacturing documents. The manual, reviewed by The Washington Post, outlines steps for obtaining the missing document after the bank has initiated foreclosure proceedings. It also lays out what lawyers must do in the event of a lost affidavit or if there is no documentation showing the history of who owned the loan, paperwork the bank should already have.

District Court in White Plains, N. Adams explained that the company updated the manual in the midst of the investigation that led to the national mortgage settlement to help its lawyers keep pace with changing laws, regulations and foreclosure procedures. This is a misrepresentation of facts. Banking lawyer Jeffrey Naimon at Buckley Sandler said the law does allow lenders to endorse notes after filing for foreclosure. He said lenders can transfer ownership of a mortgage by filling out the endorsement or leaving a blank endorsement.

Tirelli said she was also contacted by the Consumer Financial Protection Bureau and the monitor for the national mortgage settlement, both of which declined to comment for this article. Trustee Program, which oversees bankruptcies, could not be reached for comment. Read Full Article. Foreclosure Manual Pages. For that reason, an endorsement executed after filing is insufficient.