Class Action Claims Wells Fargo Induced Retired Couple into Predatory Mortgage Loan

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A Mississippi woman has filed a proposed class action lawsuit against Wells Fargo, N.A. in which she claims the bank induced her and her now-deceased husband into an “unsuitable and misrepresented” mortgage loan that the couple was deceived into believing contained a credit-life-insurance provision should one of the loan’s guarantors pass away. From the complaint:

“[The plaintiff], via the wrongful, unlawful, and tortious foreclosure activities initiated by Wells [Fargo], beginning on or about July 2017, discovered that the material promise of the inclusion of credit-life-insurance in her, and her husband’s, Homeowner’s of America, Inc., mortgage-loan (serviced by Wells Fargo Home Mortgage), was not true. The discovery of misrepresentation has set forth [the plaintiff’s] discovery of myriad of unlawful and tortious origination, servicing, and collection activities on the part of the Defendants to this Complaint.”

The complaint explains the plaintiff and her late husband entered into a loan agreement with defendant Homeowner’s Mortgage of America (with payments to be made to Wells Fargo) in March 2017. The suit says a salesman represented to the plaintiff and her late husband that the mortgage loan for their Europa, Mississippi property contained a credit-life-insurance provision that would cover the balance of the loan should either the plaintiff or her husband pass away.

According to the lawsuit, the absence of any credit-life-insurance provision constitutes from Wells Fargo and Homeowner’s Mortgage of America a breach of contract, amounting to violations of the federal Truth in Lending Act (TILA) and Real Estate Settlement Procedures Act (RESPA). Further, Wells Fargo’s reported collection and collection-reporting efforts in connection with the plaintiff’s situation amount to abuses of the Fair Debt Collection Practices Act (FDCPA) and Fair Credit Reporting Act (FCRA), the lawsuit continues.  

Moreover, the lawsuit attacks the defendants’ alleged failure to provide the plaintiff with mandatory TILA and RESPA disclosure forms. The complaint charges the disclosure forms provided to the plaintiff:

• Did not accurately list the true term of the mortgage loan—30 years, as opposed to the 15 years listed on the form;
• Did not list the inclusion of the promised credit-life-insurance endorsement; and
• Misstated the conditions of force-placed homeowners’ insurance.

Adding to these allegations are claims the defendants mishandled the plaintiff’s mortgage note with regard to the application of payments from the woman’s mortgage escrow account to the companies’ homeowners’ insurance carrier. The plaintiff asserts Wells Fargo has knowingly saddled her with “unnecessary and grossly-overpriced” force-placed homeowners’ insurance—for the purpose of financial gain.

Wells Fargo last week was fined $1 billion by the Consumer Financial Protection Bureau in connection with the bank’s unconscionable conduct with regard to its auto and mortgage loan business.

The complaint can be read below.