26 September 2018

Wells Fargo to Pay Millions to Bankrupt U.S. Homeowners

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Wells Fargo & Co will pay $81.6 million to homeowners for denying them a chance to challenge mortgage payment increases imposed during their bankruptcy proceedings, the U.S. Justice Department said on Thursday. Wells violated a 2011 U.S. bankruptcy law by failing to send a type of legal notice about homeowners' mortgage payment increases to bankruptcy courts. The law requires the notice to include disclosures to ensure that fees and charges by banks to homeowners in bankruptcy proceedings are accurate, the Justice Department said.

The settlement between Wells Fargo and the Justice Department's U.S. Trustee Program, which oversees the U.S. bankruptcy system, also requires Wells to hire an independent compliance monitor and change its internal procedures to prevent a recurrence of the problem, the Justice Department said.

The settlement is subject to approval by the U.S. Bankruptcy Court for the District of Maryland. If approved, the Justice Department said it will distribute the funds to groups of homeowners who were in bankruptcy proceedings from late 2011 through March, 2015. The bank will work with the U.S. Trustee's office and independent compliance reviewer to demonstrate the effectiveness of its changes and make payments to customers, DeVito said.

The bank was late in providing more than 100,000 notices to homeowners about mortgage payment changes and also did not timely perform more than 18,000 escrow analyses in cases involving nearly 68,000 accounts of bankrupt homeowners during the period, the Justice Department said.

Click here to access the full article on Reuters.

 

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