A recent class action lawsuit accuses Wells Fargo of extending mortgage loan terms for customers in bankruptcy without their knowledge.
Tom Goyda, a spokesman for Wells Fargo, strongly denies the claim stating that the bankruptcy courts and borrowers were notified.
The lawsuits suggest that the changes were confusing because they lowered the monthly mortgage payment for the person in bankruptcy, but in actuality they pay more on their loans for decades longer and give significantly larger amounts of money to the bank in the long run.
“The changes are part of a loan modification process from Wells Fargo,” wrote the New York Times. “But they put borrowers in bankruptcy at risk of defaulting on the commitments they have made to the courts, and could make them vulnerable to foreclosure in the future.”
Mr. Goyda disagrees, obviously, saying that Wells Fargo has helped millions of families since 2009 by providing changes to their loans and helping them to stay in their homes during the financial crisis.
According to court documents, unwanted changes are a common practice for Wells Fargo. In September 2016, the company was fined $185 million and the CEO was terminated after he was found guilty of illegally submitting unrequested changes to customers loans since 2015.
It’s unknown how many customers this has happened to, but as of June 2017 at least seven new cases have arisen in various states across the U.S. These lawsuits state that Wells Fargo changed the loans through a common form that typically records homeowners insurance costs or real estate taxes. When a court receives these forms, they usually make the changes without question.
Is Wells Fargo guilty of filing false documents and “pretending” as if they are making the courts aware? Time will tell the outcome of the many lawsuits filed against Wells Fargo.