Another Class Action RE Deceptive Loan Modification Practices – Forster, et al. v. Wells Fargo, et al.
New York, New York, November 23, 2010 (GLOBE NEWSWIRE) – The law firm of Harwood Feffer LLP (www.hfesq.com) today announced that it filed a class action lawsuit against Wells Fargo Bank, N.A. (NYSE:WFC), and its loan servicing division, America’s Servicing Company (“ASC”), for fraudulent and deceptive practices related to loan modifications.
The lawsuit, filed in the United States District Court for the Northern District of California, Forster, et al. v. Wells Fargo, et al., Index. No. CV-10-5321(BZ), alleges that ASC improperly and unlawfully induced borrowers to default on their mortgages by informing borrowers that loan modifications would not be considered for those individuals who were current on their payments. By making loan default a pre-requisite 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.
ASC is a loan servicer, meaning it does not have a beneficial interest in the mortgage loans it oversees but rather is contracted to administer and enforce the terms of the mortgage agreement. 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.
Full complaint below…