Wells Fargo COVID-19 Mortgage Forbearance Lawsuit Settled for $185 Million

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Wells Fargo has agreed to pay $185 million to settle a proposed class action lawsuit that alleged the bank placed customers’ mortgages into forbearance without consent during the early days of the COVID-19 pandemic.

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The Wells Fargo class action settlement received preliminary approval from the court in July 2024, and the official website for the deal can be found at WellsFargoCovidForbearanceLitigation.com.

The settlement will provide compensation to a class of United States residents who had a mortgage serviced by Wells Fargo that was placed into a COVID mortgage forbearance without adequate informed consent between March 1, 2020 and December 31, 2021, including anyone who signed the deed of trust, mortgage, or other security document associated with a mortgage, even if they did not sign the underlying promissory note or loan.

The Wells Fargo mortgage forbearance settlement excludes individuals who were a debtor or the co-borrower of a debtor in a Chapter 13 bankruptcy case on the date that the mortgage was placed into forbearance.

According to the settlement website, the first $69 million of the $185 million deal will be equally and automatically distributed among class members. Co-borrowers on a mortgage will be treated as a single class member and receive a single automatic payout. Each co-borrower will also get an additional $83.33.

“You do not need to take any action to receive the automatic payment or additional co-borrower payment(s),” the site says.

Related Reading: Class Action Alleges Wells Fargo Placed Mortgages into CARES Act Forbearance Without Borrowers’ Consent

Head to this page to update your address and select your preferred payment method. You’ll need to enter the unique ID included in the settlement notice you received in the mail or via email. If you lost or never received your notice, contact the settlement administrator using the information provided here.

Class members who suffered damages due to Wells Fargo’s forbearance conduct—such as delayed refinancing, increased borrowing costs or denied or delayed credit applications—can file a claim form for additional compensation.

To file a claim form online, head to this page and enter your unique ID. The deadline for submitting a claim form is January 10, 2025.

Payments for timely, valid claims will be sent out only after the settlement receives final approval from the court and any appeals are resolved in favor of the deal. A final approval hearing has been scheduled for December 10, 2024.

The initial class action lawsuit against Wells Fargo notes that in 2020, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act to give homeowners the right to request that their mortgage loan be temporarily placed into forbearance. According to the case, Wells Fargo automatically placed hundreds of thousands of mortgage loans within its servicing portfolio into forbearance without any advance notice to affected borrowers. The filing argues that the decision harmed borrowers’ credit while benefiting Wells Fargo’s bottom line.

Are you owed unclaimed settlement money? Check out our class action rebates page full of open class action settlements.