Keller Rohrback L.L.P. Files First Class Action Suit Against Wells Fargo Relating To Mortgage Interest Rate-Lock Extension Fees
Keller Rohrback L.L.P. , the law firm that filed the first class action lawsuit over the Wells Fargo fake account scandal, today filed a new class action lawsuit alleging the bank wrongly charged residential borrowers fees to extend their mortgage interest “rate locks.”
Keller Rohrback filed the lawsuit against Wells Fargo & Company, Wells Fargo Bank, N.A., and Wells Fargo Home Mortgage in the Northern District of California on behalf of first-time home buyer Victor Muniz and a proposed nationwide class of similarly situated individuals.
The lawsuit alleges that Wells Fargo systematically charged its customers a fee to extend the period that their offered mortgage interest rate was “locked in,” even though the Bank caused delays in the closing process. Recent reporting in ProPublica first disclosed the practice, which has been the subject of online complaints, as alleged in the complaint. Wells Fargo has reportedly hired a law firm to conduct an internal investigation and fired several managers who were allegedly involved. The Consumer Financial Protection Bureau is also now reportedly investigating the practice.
“The same profit-over-people culture that fostered Wells Fargo’s fake account scandal appears to have led the bank to stick borrowers with unwarranted fees,” said Derek Loeser, a partner with Keller Rohrback L.L.P. in Seattle. “Mr. Muniz and we hope to hold the bank accountable.”
Here is how the practice works, according to the complaint, which is based on publicly available information and Keller Rohrback’s investigation: When a customer approaches a bank for a home loan or to refinance an existing loan, banks and consumers often agree to “lock in” a stated interest rate for a set period of time; usually for 30 to 90 days. If paperwork or other delays prevent the closing of the loan and that period expires, the period can be extended.
If the reason for the delay was the borrower’s fault, the banks will often charge the borrower a fee to extend the rate-lock period. But if the delay is the bank’s fault, the bank is supposed to absorb the cost of extending the rate-lock period.
The complaint alleges that Wells Fargo regularly and systematically charged borrowers with unwarranted rate-lock extension fees when the closing delays were the fault of the bank, and that Wells Fargo managers pressured employees to find any excuse (even potentially manufacturing an excuse) to blame the borrowers for the delays. Borrowers often found themselves in the difficult position of paying these unjustified fees or risk not closing on a home, or paying a higher rate.
The complaint includes claims under the federal Real Estate Settlement Procedures Act, Truth in Lending Act, and state common law and statutory consumer claims.
According to a whistleblower letter attached to the complaint, the practice has cost borrowers millions of dollars in the Los Angeles area alone.
If you believe that you may have been improperly charged a fee to extend a lower interest rate by Wells Fargo and want to learn more about your rights call attorney Matthew Preusch at (800) 776-6044 or via email at to discuss your potential legal claims.
About Keller Rohrback L.L.P.
Keller Rohrback L.L.P. is a consumer-rights class-action law firm. Our Complex Litigation Group is proud to offer its expertise to clients nationwide with offices in six locations. Our trial lawyers have obtained judgments and settlements on behalf of clients in excess of $18 billion dollars.
The firm’s record of success includes settlements with numerous Fortune 500 companies accused of cheating their employees and customers. Recently, managing partner Lynn Sarko was appointed to the Plaintiffs’ Steering Committee in the landmark Volkswagen “Clean Diesel” litigation as well as the Fiat Chrysler Automobiles “EcoDiesel” litigation. Connect with us on Facebook, Twitter and LinkedIn.