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Wells Fargo alleged to have 'enriched itself' instead of helping homeowners

By Shaun Zinck | May 1, 2015

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A major bank faces a civil suit over allegations it used federal funds to enrich itself rather than help struggling homeowners modify their mortgages.

Shea Hecht filed the lawsuit April 23 in U.S. District Court Eastern District of New York against Wells Fargo Home Mortgage and Gross Polowy Orlans, alleging the bank delayed applications and extended trial modification periods “in order maximize its own revenue and fees..defrauding homeowners.”

Under the Home Affordable Modification Program (HAMP) banks received federal funding in order to help struggling homeowners modify their mortgages and allow them to keep their homes. The lawsuit says Wells Fargo accepted about $25 billion through the program, and was required to participate in HAMP because it receives federal funding through the Trouble Asset Relief Program.

Hecht alleges Wells Fargo used the program to “enrich itself” and assessed prohibited and hidden fees on the loans of homeowners who had received permanent modifications through the program.

The lawsuit seeks class status for those in similar situations against Wells Fargo. Hecht said damages will exceed $5 million, and is also asking for court costs. She is represented by attorneys Jason P. Sultzer, Joseph Lipari and Jean M. Sedlak of The Sultzer Law Group in Poughkeepsie, New York.

U.S. District Court Eastern District of New York case number: 1:15-cv-02338.

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Organizations in this Story

Wells Fargo & Company