Wells Fargo agreed to pay $50 million dollars in response to a lawsuit that alleges the firm was overcharging hundreds of thousands of its customers for appraisals of their defaulted mortgages.
The settlement still faces court approval. If the settlement is approved, it will finally lay to rest the nationwide debate regarding how the banking giant handled third-party mortgage appraisals.
Wells Fargo allegedly charged hidden fees to customers for broker price opinions (BPOs), and thus exploited borrowers who could least afford it and greatly exacerbated their already burdensome debt. The lawsuit alleges the bank was charging, in most instances, $45-75 dollars more than the fair market price for appraisals. These exorbitant charges added hundreds, and in some cases, thousands of dollars to borrowers mortgages, Reuters reports.
“While we believe our practices related to Broker Price Opinions were proper and disagree with the claims in the lawsuit, we have agreed to settle the matter to avoid further litigation,” Wells Fargo Senior Vice President, Consumer Lending Communications, Tom Goyda tells The Daily Caller News Foundation.
Some 250,000 homeowners will be covered by the proposed settlement.
The settlement comes atop other scandals facing the financial conglomerate and does nothing to help its increasingly tarnished public image.
Wells Fargo employees issued 565,000 lines of credit and opened 1.5 million bank accounts for customers without their consent, and sometimes created false email addresses to sign them up for banking services in order to pad their numbers. As a result, the firm was fined $185 million by the CFPB and faced congressional oversight which culminated in the termination of long-time CEO John Stumpf. (RELATED: Wells Fargo Just Got Slapped With The Biggest Fine In CFPB History)
As with prior scandals involving average banking customers, mortgage borrowers were completely unaware of the possible fraudulent activity carried out by Wells Fargo.
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