BALTIMORE (Legal Newsline) - Maryland Attorney General Doug Gansler and Wells Fargo have settled allegations stemming from the marketing of adjustable rate mortgages.
The agreement calls for loan modifications for certain consumers and a nearly $1 million payment to Gansler's office for restitution to "Pick-a-Payment" borrowers whose homes were foreclosed on. Gansler said 11 other state attorneys general have reached a similar agreement with Wells Fargo.
"Especially in these difficult times, we focused this agreement on securing relief for vulnerable homeowners and those who have faced foreclosure," Gansler said.
"Wells Fargo is addressing these particularly troubling issues with mortgages issued by companies that Wells Fargo acquired."
The adjustable rate mortgages in question were written by Wachovia and Golden West, two companies acquired by Wells Fargo in 2008. Gansler said the companies did not fully explain the "Pick-a-Payment" plan to borrowers who chose an option wherein the minimum payments did not cover the full interest on the loan.
Wells Fargo will consider modifications for those customers and use the federal Home Affordable Modification Program. If the customer is not eligible for a HAMP modification, then Wells Fargo will use its own program.
It also paid $940,056 to Gansler's office for restitution to those who lost their homes. Those customers will be contacted by Gansler's Consumer Protection Division.
From Legal Newsline: Reach John O'Brien by e-mail at email@example.com.