New class action suit accuses Wells Fargo of home loan fraud – NMP Skip to main content

New class action suit accuses Wells Fargo of home loan fraud

Sep 09, 2009

A new class action filed on behalf of a single mother challenges Wells Fargo Bank’s mass suspension of Home Equity Line of Credit (HELOC) accounts and credit limit reductions. According to the lawsuit, which comes on the heels of another class action filed recently in Illinois, claims Wells Fargo fraudulently froze millions of dollars in home loans by falsely claiming that its customers’ finances had materially changed. The suit further alleges that Wells Fargo suspended accounts based on disputed “derogatory” items on its borrower’s credit reports in violation of the Truth-in-Lending Act (TILA). The suit is filed on behalf of Marika Hamilton, of Fort Wayne, Ind. who claims that Wells Fargo pulled her credit report only to turn around and suspend her HELOC account due to a supposed “derogatory credit” item. In reality, Ms. Hamilton, who owns and runs her own small business, enjoys a stellar credit history. To make matters worse, the lone derogatory item Wells Fargo used to support its suspension of her account--a $25 late charge that she vigorously disputed--was actually caused by Wells Fargo in the first place. The complaint then alleges that Wells Fargo customer service representatives informed Ms. Hamilton that the harder she challenged Wells Fargo’s actions, the harder Wells Fargo would push back. When Hamilton asked what to do with her money if her HELOC was not safe, bank personnel responded she “should carry cash.” “Marika Hamilton is a model borrower. She owns her own small business in Fort Wayne, makes all her payments on time, and--in these tough times--she works tirelessly as a single mom to provide for her two daughters,” said attorney Jay Edelson, whose law firm, KamberEdelson LLC, represents Ms. Hamilton and has previously filed class action lawsuits against Wells Fargo, JPMorgan Chase, WAMU and Citibank over their HELOC account suspension and reduction practices. “Wells Fargo caused a late charge to be put on Ms. Hamilton’s credit report that never should have been there to begin with. It then used that item to justify suspending her entire credit line,” Edelson continued. “Adding insult to injury, the bank then threatened her and her business if she dared to stand up for herself. This is what Wells Fargo has done with the $25 billion in bailout money. Illegality aside, it’s flatly appalling.” Edelson is joined on the suit by KamberEdelson attorneys Steven Lezell and Evan Meyers. A copy of the lawsuit may be found by clicking here. For more information, visit www.kamberedelson.com.
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Sep 09, 2009
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