Become a digitalPLUS subscriber. 99¢ for 4 weeks.
NewsBreaking

Wells Fargo agrees to pay restitution to mortgage borrowers

Wells FargoConsumersFinanceFinancial and Business ServicesMortgagesWachovia Corp.

Under an agreement announced Thursday by the Maryland Attorney General's Office, Wells Fargo has agreed to make loan modifications and pay nearly $1 million in restitution to customers of two lenders acquired by the bank.

The office's Consumer Protection Division, which reached the agreement with Wells Fargo, said lenders Wachovia and Golden West Financial used deceptive marketing in offering consumers adjustable-rate home loans.

Wells Fargo will pay $940,056 to borrowers with "Pick-a-Payment" mortgages written by Wachovia and Golden West who lost their homes in foreclosure, the agreement says. Wells Fargo acquired the two lenders in 2008.

So far about 250 borrowers in Maryland with "Pick-a-Payment" mortgages are known to have lost their homes to foreclosure, but that number could grow, said David Paulson, a spokesman for the Attorney General's Office.

In addition to the agreement in Maryland, Wells Fargo has signed similar pacts with attorneys general in 11 states.

"Wells Fargo is further helping at-risk Wachovia 'Pick-a-Payment' customers who may be eligible to earn principal forgiveness by making on-time mortgage payments," said Tom Goyda, a vice president and spokesman for Wells Fargo Home Mortgage.

The agreement says Wachovia and Golden West offered borrowers a choice of several types of mortgages, including 30-year fixed-rate loans.

But one option allowed borrowers to make payments for less than the interest actually due, according to the agreement. The Consumer Protection Division said the lenders did not fully explain to borrowers who chose those loans that their minimum payments would not cover the full interest and that their principal debt would increase.

Wells Fargo also has agreed to consider modifying loans for borrowers with "Pick-a-Payment" contracts, using the federal Home Affordable Modification Program or Wells Fargo's own loan modification program.

The bank is not providing any estimates about the number of borrowers who might be eligible, Goyda said.

He said Wells Fargo has attempted to help at-risk Wachovia "Pick-a-Payment" customers since acquiring the lender. The bank has modified loans by reducing interest rates, extending loan terms and forgiving principal amounts, he said.

The Consumer Protection Division will contact consumers who might be eligible for loan modifications.

Lorraine.mirabella@baltsun.com

Copyright © 2014, The Baltimore Sun
Related Content
Wells FargoConsumersFinanceFinancial and Business ServicesMortgagesWachovia Corp.
  • Top 10 most expensive homes in the Baltimore region in 2013 [Pictures]
    Top 10 most expensive homes in the Baltimore region in 2013 [Pictures]

    Home prices in the Baltimore metro region rose slowly and steadily in 2013, as the housing market worked on recovery. These 10 homes, many of them waterfront properties in Anne Arundel or Baltimore counties, represented the top sales for the year. With four homes in the top 10, Annapolis had...

  • Local housing market Top 10s for 2012 [Pictures]
    Local housing market Top 10s for 2012 [Pictures]

    Which ZIP codes and city neighborhoods in the Baltimore metro area had the most home sales? The biggest drops in price? Baltimore Sun reporter Steve Kilar analyzed data from Metropolitan Regional Information Systems' RealEstate Business Intelligence to find the extremes during 2012,...

  • Most expensive Baltimore-area communities 2012 [Pictures]
    Most expensive Baltimore-area communities 2012 [Pictures]

    These are the most expensive ZIP codes in the Baltimore metro area and neighborhoods in the city during 2012, according to an analysis by Baltimore Sun reporter Steve Kilar of average sale price data from Metropolitan Regional Information Systems' RealEstate Business Intelligence. Areas...

  • Average price change for Baltimore-area homes - All of 2012
    Average price change for Baltimore-area homes - All of 2012

    ul#tabnav { /* general settings */ border-top-right-radius: 15px;text-align: left; /* set to left, right or center */ margin: 1em 0 1em 0; /* set margins as desired */ font-weight: bold; /* set font as desired */ border-bottom: 1px solid #bfc7c7; /* set border COLOR as desired */...

  • Most expensive Baltimore-area communities [Pictures]
    Most expensive Baltimore-area communities [Pictures]

    These are the most expensive ZIP codes in the Baltimore metro area and neighborhoods in the city during the first half of 2012, according to a Baltimore Sun analysis of average sale price data from Metropolitan Regional Information Systems' RealEstate Business Intelligence. Areas were...

  • Housing market Top 10s in the Baltimore area in early 2012 [Pictures]
    Housing market Top 10s in the Baltimore area in early 2012 [Pictures]

    Which ZIP codes and city neighborhoods in the Baltimore metro area had the most home sales? The biggest drops in price? The Baltimore Sun analyzed data from Metropolitan Regional Information Systems' RealEstate Business Intelligence to find the extremes during the first half of 2012,...

Comments
Loading