Yet another class action suit with the potential to reap millions for consumers has been filed against a pair of the country’s biggest mortgage lenders.This time, Wells Fargo and Chase have been fingered over allegedly deceptive mortgage default fee practices, law firm Baron and Budd announced.
The suit claims the lenders charged homeowners over inflated fees once they began to fall behind on mortgage payments.
Late fees are run-of-the-mill in the lending sector, but the suit says some consumers were overcharged by as much as 300 per cent.
“Loan agreements require that default-related services must be reasonable and appropriate,” said attorney Roland Tellis. “Banks are not allowed to mark up the charges so they can make a profit, but that is exactly what they have done.”
Typical late fee charges run as low as $20, but the firm says Chase and Wells Fargo charged fees as high as $135, listed on statements as “other charges” or “miscellaneous fees.”
Whether it’s a strategic default or not, once a homeowner falls significantly behind on mortgage payments, fees are levied to cover the cost of hiring an agent to asses the home for foreclosure sale.
Spokespersons from Wells Fargo and Chase did not return requests for comment by press time.
The banks are also being targeted in a recently revealed investigation into allegedly deceptive force-place insurance practices.
New York’s Department of Financial Services is looking into whether the policies the banks issued to homeowners were issued by their own affiliates – violating antitrust law – and whether they took kickbacks for pushing policies from affiliated insurers.
For more information on joining the mortgage fee suit, contact Baron and Budd at 1.866.844.4556 or email [email protected].