San Jose Short Sales – Borrowers Sue Wells Fargo
One of my morning routines is to spend an hour or so reading updates on what’s happening in the world of banks, lenders, servicers, Robo-Signing, foreclosures, short sales, etc. This is what I refer to as “The Land of Oz” because when dealing with Big-Bad-Banks we are often dealing with people without hearts or brains.
As I was perusing DSNews, one headline caught my eye:
Defaulted Borrowers file Lawsuit against Wells Fargo.
After working San Jose Short Sales for over two years, I am intrigued by reading that borrowers are taking action against their beloved banks and loan servicers and attempting to hold them accountable for their dubious business practices. There is rarely a day that goes by that I do not hear about yet another way a borrower is screwed-over by their BIG-BAD-BANK.
This morning a DSNews article reported that a law firm filed a class action suit against one of the Biggest of the Badest Banks – Wells Fargo Bank and America’s Servicing Company (“ASC”), its servicer.
The premise of the lawsuit is that America’s Servicing Company told borrowers they would not be eligible for a loan modification as long as they were current on their payment. The effect of this advice was to encourage borrowers to default on their mortgages if they wanted a loan modification.
The claim in the class action lawsuit is that America’s Servicing Company induced borrowers to default on their mortgages in order to charge penalty and fees associated with the late payments. Bad-Bad-Bad!
“As a loan servicer, ASC generates a significant portion of its revenue from fees, penalties, and interest collected on the non-performing loans it services. Consequently, it is in ASC’s financial interest to avoid, delay, and deny loan modifications and to pursue foreclosures because doing so will lead to increased revenue.”
OUCH – Truth Hurts those Big-Bad-Banks!
A Borrower, who has not defaulted, yet is financially distressed and facing imminent default may be eligible for a loan modification if financial hardship can be demonstrated, according to the Home Affordable Modification Program guidelines. Guess who determines financial hardship? BIG-BAD-BANKS!
Alleged in the class action lawsuit: “By making loan default a prerequisite for modification, without regard to whether a borrower otherwise qualified for a modification due to financial hardship, ASC caused borrowers to unnecessarily suffer ruined credit and subjected them to significant fees, penalties and interest.”
Wells Fargo said: “We believe, as we have from the beginning of this crisis that it is in our customers’ and the country’s best interests to assist customers who can afford their homes – with some help – to remain in them. And, it is our goal to exhaust all options before moving a home to foreclosure sale.”
I say the proof is in the number of successful loan modifications – which relatively speaking – are very few indeed!
Are you facing foreclosure? You can avoid foreclosure. There are foreclosure alternatives that can help save your credit.
Call 1-800-972-1822 or visit San Jose Short Sales and request a free consultation to discuss foreclosure alternatives.
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San Jose Short Sales – Borrowers Sue Wells Fargo Bank – by Kathleen Daniels, San Jose Real Estate Agent