New Wells Fargo Lawsuit Filed Over Alleged Mortgage Loan Modification ‘Error’ Overcharges

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Wells Fargo faces a new class action lawsuit after the bank allegedly overcharged tens of thousands of mortgage loan accounts with certain modifications, and then tried to settle the problem by sending cashier’s checks to consumers without explaining the apparent error.

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The 20-page Wells Fargo lawsuit states that the bank, starting around June 2024, began to send consumers “cryptic letters” indicating that an “error may have occurred related to your approved and finalized loan modification.” The letters also stated that Wells Fargo “apologize[d] for any inconvenience this may have caused,” and contained a cashier’s check “to make thing right,” with no explanation as to the apparent error, the complaint says.

“Indeed, it is not even clear from Wells Fargo if the ‘error’ was an overcharge or some other servicing error,” the filing reads, noting that it is also unknown when the purported error or errors occurred.

The suit says that Wells Fargo has not only failed to describe the error but has also failed to provide any accounting or itemization to show what exactly happened to consumers’ mortgage loan accounts, making it impossible for impacted accountholders to determine their actual damages. This is compounded by the fact that the plaintiff received two separate letters with separate checks for different amounts, $500 and $690.65, within two calendar days, the complaint relays.

Consumers who received cashier’s checks recovered “only a fraction of their actual damages,” which to date remain undisclosed, the lawsuit emphasizes, calling any relief provided by Wells Fargo “wholly inadequate.”

“Wells Fargo’s flippant attempt to mitigate its liability is inadequate and has left consumers, including Plaintiff, facing ongoing harm and out-of-pocket loss that has yet to be reimbursed,” the case scathes.

The case calls the allegations the latest example of Wells Fargo’s “targeted pattern and history of engaging in unfair and unlawful business practices” at the expense of consumers, citing recent scandals concerning forced-placed insurance and unwanted enrollment in various financial products.

The Wells Fargo class action looks to cover all individuals in the United States who, within the relevant statute of limitations period, received at least one letter from Wells Fargo alerting them that an error had occurred in relation to their mortgage loan and/or modification and enclosing a payment to compensate the consumer.

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