Wells Fargo and JPMorgan Chase have been hit with a class action lawsuit claiming that they charged borrowers excessive fees for default-related services after they fell behind on their mortgage payments. These fees are allegedly disguised under vague categories such as "other charges," "corporate advances" or "miscellaneous fees" and range from $20 and $135. While lenders are allowed to assess fees for services needed upon default, such as property inspections, they are not permitted to mark-up the charges for their own profit or order unnecessary services. According to the class action lawsuit, Wells Fargo and JPMorgan Chase, which service nearly 25% of all U.S. mortgages, have been overcharging consumers by as much as 300%.
Unnecessary, Excessive Broker Price Opinion Fees
The class action lawsuit claims that the borrower is charged fees when they are late with their loan payments, and the bank’s system starts the default process by imposing fees on the borrower. Among these fees is a charge for a real estate broker, hired to determine the property’s value and help the bank price the home for foreclosure. While lenders are allowed to charge a fee for this service, which is known as the broker’s price opinion, it has been alleged that Wells Fargo and Chase have been illegally assessing marked-up fees against their borrower's accounts. According to the suit, the banks are often generating more profit from defaulted loans than current ones.