LOS ANGELES--(EON: Enhanced Online News)--Baron and Budd attorneys, led by Roland Tellis and Mark Pifko in Los Angeles, filed a class action lawsuit today alleging that two home mortgage lending giants illegally levied excessive and deceptive default service fees against borrowers who were late on mortgage payments.
“Loan agreements require that default-related services must be reasonable and appropriate. Banks are not allowed to mark-up the charges so they can make a profit, but that is exactly what they have done. In many cases, the banks are overcharging by as much as 300 percent.”
The suit states that Wells Fargo and JPMorgan Chase, who, together, service approximately 25 percent of all U.S. mortgages, allegedly cheated hundreds of thousands of borrowers by charging abusive default fees. Baron and Budd attorneys believe that the two banks may have potentially defrauded borrowers out of a billion dollars or more.
“Wells Fargo and Chase executives conspired to increase profits in any way they can, even if that meant deceiving homeowners who were losing out on the American dream,” said attorney Roland Tellis. "In addition to charging unnecessary and marked-up fees, the banks concealed the fees through cryptic wording."
According to the suit, the amount of the inflated or unnecessary charges can vary, from $20 for some services, to as much as $135 for others. As part of the banks’ efforts to hide the true nature of the charges, these fees are typically listed on a borrower’s monthly statements as “Other Charges,” “Miscellaneous Fees” or “Corporate Advances.”
According to the lawsuit, the fees are charged when a borrower is late on a payment, and the bank’s computer programs begin the default process by levying fees against the borrower. One of these fees is used to hire a real estate broker to assess the value of the home based on similar properties. The real estate agent’s assessment is called the broker’s price opinion (BPO) and is used to help the lender price the property for foreclosure.
Federal law allows lenders to charge these BPO fees, but they are not allowed to mark up the charges or perform unnecessary services and make a profit, which is what Wells Fargo and Chase have done, according to the suit.
“Our investigation has revealed that as a result of these practices, banks often make more money from loans that are in default than loans that are current," said attorney Mark Pifko. “Loan agreements require that default-related services must be reasonable and appropriate. Banks are not allowed to mark-up the charges so they can make a profit, but that is exactly what they have done. In many cases, the banks are overcharging by as much as 300 percent.”
Baron and Budd has helped consumers fight against bank fraud by serving on the plaintiffs’ steering committee in the 2011 overdraft fee litigation that resulted in a $410 million settlement for consumers against Bank of America.
Baron and Budd attorneys are offering free consultations for consumers to determine whether mortgage lenders have charged excessive default fees. Contact Baron and Budd at 1.866.844.4556 or email firstname.lastname@example.org to learn more. There is no obligation for our review of your case.
About Baron & Budd, P.C.
The law firm of Baron & Budd, P.C., with offices in Dallas, Baton Rouge, Austin, Los Angeles and Miami, is a nationally recognized law firm with a 30-year history of "Protecting What's Right" for people, communities and businesses harmed by negligence. Baron & Budd's size and resources enable the firm to take on large and complex cases. The firm represents individuals, governmental and business entities in areas as diverse as water contamination, Gulf oil spill, Qui Tam, California Proposition 65 violations, dangerous medications and medical devices, Chinese drywall, insurance claims, commercial litigation, consumer fraud, securities fraud and asbestos-related illnesses such as mesothelioma. Learn more about the mesothelioma attorneys at Baron & Budd.