A homeowner has filed a class action lawsuit against mortgage giant Wells Fargo, accusing the lender of charging thousands of customers extra fees to extend their interest rate lock-ins after borrowers’ mortgage applications were delayed.
The lawsuit was a filed by a homeowner in San Francisco federal court on Monday. The lawsuit alleges that Wells Fargo employees blamed homeowners for processing delays on the applications and then forced them to pay extra fees to extend the lock-in period on their mortgage rate. Wells Fargo has yet to comment on the lawsuit.
An interest rate lock is when a lender secures a set interest rate for a specified period while the loan is being processed. If the rate lock expires before the loan goes to settlement, lenders generally cover the cost of extending the lock if the delay was their fault.
Wells Fargo’s lock-ins are usually for 30 to 90 days. But the lawsuit alleges that loan applications often take the bank longer than that to process due to staffing issues. The bank is accused of blaming borrowers for the delays and then charging them fees of anywhere from 0.125 percent to 0.25 percent of the loan amount. Victor Muniz, a Nevada resident and who is the plaintiff in the lawsuit, says he was charged $287.50 to extend the interest rate lock after his loan application was delayed by the bank.
The lawsuit comes on the heels of another filed last month against Wells Fargo alleging the bank charged several hundred thousand borrowers for auto insurance they never requested.
Source: “Homeowner’s Lawsuit Says Wells Fargo Charged Improper Mortgage Fees,” Reuters (Aug. 29, 2017)
