UFAN is dedicated to fighting for justice for American property owners. These borrowers deserve relief and we are determined to help
Roseville, California (PRWEB) September 30, 2011
UFAN Legal Group, PC, DBA: United Foreclosure Attorney Network (UFAN) filed a lawsuit in Sacramento Superior Court (case number 34-2011-00110146), alleging in part that the negative amortization mortgages acquired by Wells Fargo were predatory and injured borrowers.
Golden West Financial was one of the country’s leaders in the issuance of “Pick-a-Pay” loans. These loans are negative amortization loans, meaning: the minimum monthly payment may not cover all of the accrued interest on the loan. The unpaid interest is then added to the principal balance of the loan. Not only is the borrower not paying down the balance, but the balance is actually growing as interest remains unpaid and the balance to which interest applies grows over time. A report by the Charlotte Observer details how Wachovia inherited Golden West's pick-a-pay mortgages when it acquired the California bank in 2006. Wachovia was then acquired by Wells Fargo in 2008. As reported in the media, there have been widespread allegations that Golden West and Wachovia misrepresented these loans to clients. It is alleged in the UFAN complaint that even prime borrowers with good credit were placed in these subprime loans. The complaint states that these borrowers were often told that they were being placed in the most beneficial loan available to them. According to the filing, the motivation for placing prime borrowers in highly predatory subprime loans were the high origination fees paid to brokers and agents who originated these loans.
The California Attorney General brought claims against Wells Fargo for these negative amortization loans, the Charlotte Observer reported. At the time, the then attorney general, Jerry Brown, stated, “Customers were offered adjustable-rate loans with payments that mushroomed to amounts that ultimately thousands of borrowers could not afford.” When the payments ballooned and homeowners defaulted, borrowers were foreclosed and dispossessed of their properties, the report states. In 2010, Wells Fargo settled with the Attorney General for liability surrounding the improper practices of Golden West and Wachovia. According to the report, Wells Fargo agreed to pay $32 million in restitution to homeowners who had lost their homes to foreclosure, as well provide loan modification worth $2 billion for borrowers who had “pick-a-pay” loans with Golden West or Wachovia.
Earlier in December, as reported by Reuters, Wells Fargo settled a class action suit brought on behalf of borrowers injured by the negative amortization loans issued by Wachovia between 2003 and 2008. Plaintiffs alleged that the loans violated federal truth in lending laws because the loan documents failed to adequately disclose the potential for the loan balance to actually increase over time. As part of this settlement, Wells Fargo paid out $50 million and agreed to modify the loans of borrowers who are still in their homes, the report states.
According to the complaint filed by UFAN, Wells Fargo is not properly working with distressed homeowners in highly predatory loans, such as the “Pick-a-Pay” loans to modify the terms. The complaint alleges that Wells Fargo is responsible for the negligence of the banks it acquired and for its own negligence in its servicing of these loans after the acquisition. Because of the alleged negligence, the borrowers were injured.
“UFAN is dedicated to fighting for justice for American property owners. These borrowers deserve relief and we are determined to help,” says Kristin Crone, Attorney and CEO of UFAN.
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ABOUT THE UNITED FORECLOSURE ATTORNEY NETWORK
UFAN Legal Group, PC, DBA: United Foreclosure Attorney Network (UFAN) is a Roseville, California-based law firm providing mortgage litigation and other debt related legal services. The dedicated attorneys and staff at UFAN work tirelessly to seek justice and fight for the rights of its clients. For more information call toll free 1-866-400-4242.
This release may constitute attorney advertisement. The information in this release and on the UFAN website (ufanlaw.com) is for general information purposes only. Nothing in this release or on the UFAN website should be taken as legal advice. Prior successes are no guarantee of future performance. Litigation is inherently uncertain and results in litigation are never assured.