CHARLOTTE, N.C.–Wells Fargo is facing yet another consumer lawsuit, this time alleging that it bilked home loan borrowers by charging them extra fees when their applications were delayed — even when it was the bank’s fault.
The new suit, filed Monday in federal court in San Francisco, is the latest development in a growing controversy over the practices of the bank’s home loan unit and one of several new problems that have emerged at Wells Fargo over the last year in the wake of the bank’s sham-accounts scandal, reported the Los Angeles Times.
The mortgage fee matter is already the subject of a whistle-blower’s wrongful termination lawsuit and a probe by the Consumer Financial Protection Bureau. It has also spurred an internal review, which appears to have led to a shake-up in Wells Fargo’s mortgage division, the Times added.
The Los Angeles Times added that the suit has been filed by the same attorneys at Seattle law firm Keller Rohrback who in 2015 sued Wells Fargo over its creation of unauthorized checking, savings and credit card accounts. Their case, one of the few filed before the bank admitted last year to creating millions of potentially unauthorized accounts, led to a $142-million class-action settlement with Wells Fargo.
At issue are mortgage fees known as rate-lock extension fees. At Wells Fargo, like at most lenders, the bank is supposed to waive the fee if it is responsible for any delays. But in the new lawsuit, the Los Angeles Times said Las Vegas security guard Victor Muniz is alleging that Wells Fargo charged him a rate-lock extension fee of $287.50, even though delays in his mortgage approval were caused by the bank and even though a banker initially told Muniz he would not have to pay the fee.
Muniz is further alleging the bank was responsible for delays in part because it hired an appraiser who was out of the country while Muniz’s mortgage application was being processed. The suit, brought on behalf of Muniz and all other borrowers who may have paid improper fees, is seeking class-action status.
The Los Angeles Times further reported that the claims in the case mirror those made in a lawsuit filed last month by former mortgage banker Mauricio Alaniz, who worked for Wells Fargo in Beverly Hills.