The law firm of Harwood Feffer LLP has announced that it has filed a class action lawsuit against Wells Fargo Bank NA and its loan servicing division, America's Servicing Company (ASC), for fraudulent and deceptive practices related to loan modifications. The suit, filed in the United States District Court for the Northern District of California, Forster, et al. v. Wells Fargo, et al., Index. No., alleges that ASC improperly and unlawfully induced borrowers to default on their mortgages by informing borrowers that loan modifications would not be considered for those individuals who were current on their payments. By making loan default a pre-requisite for modification, without regard to whether a borrower otherwise qualified for a modification due to financial hardship, or ASC caused borrowers to unnecessarily suffer ruined credit and subjected them to significant fees, penalties and interest.
As a loan servicer, ASC generates a significant portion of its revenue from fees, penalties and interest collected on the non-performing loans it services. Harwood Feffer's clients believe that it is in ASC's financial interest to avoid, delay and deny loan modifications and to pursue foreclosures because doing so will lead to increased revenue.
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