Skip to main content

New class action suit accuses Wells Fargo of home loan fraud

NationalMortgageProfessional.com
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.
Published
Sep 09, 2009
CFPB Reports Trends In Financial Assistance

The latest developments from this study reveal that most consumers have exited the payment assistance they received at the start of the pandemic.

Analysis and Data
Jul 14, 2021
CFPB Orders GreenSky To Refund $9M In Unauthorized Loans

The consent order requires GreenSky to refund or cancel up to $9 million in loans for the customers harmed by this illegal conduct.

Regulation and Compliance
Jul 13, 2021
CFPB Warns Landlords And Consumer Reporting Agencies To Report Accurate Rental Information

Inaccurate rental or eviction information can unfairly block families and individuals from safe, affordable housing.

Regulation and Compliance
Jul 01, 2021
FHFA Mandates Quarterly Fair Lending Reports

FHFA issued orders for all enterprises to submit quarterly Fair Lending Reports with data and information to improve the FHFA’s capabilities. 

Regulation and Compliance
Jul 01, 2021
FHFA Follows CFPB To Protect Borrowers Once COVID-19 Foreclosure And Eviction Moratoriums End

The Federal Housing Finance Agency made it clear that Fannie Mae and Freddie Mac servicers are not permitted to make first notice or filing for foreclosure that would be prohibited by the CFPB protections for borrowers affected by COVID-19.

Regulation and Compliance
Jun 30, 2021
CFPB Finds Evidence Of Redlining And Deceptive Acts In 2020

Enforcement actions resulted in more than $124 million in consumer remediation and civil money penalties in 2020

Regulation and Compliance
Jun 29, 2021