Not only did Wells Fargo illegally buy the insurance, it took a commission for doing so.
Pittsburgh, PA (PRWEB) April 11, 2011
On April 7, 2011, Plaintiff Desiree Morris filed a class action lawsuit against Wells Fargo Bank, N.A. and Wells Fargo Home Mortgage, Inc., in U.S. District Court in the Western District of Pennsylvania. The lawsuit alleges that Wells Fargo purchased excessive flood insurance for Morris, accepted a commission for purchasing this unnecessary insurance, and then charged Morris for the favor. “Not only did Wells Fargo illegally buy the insurance, it took a commission for doing so,” said Plaintiff’s attorney Kai Richter.
According to the Complaint, Wells Fargo unlawfully required Morris to carry flood insurance in an amount nearly $100,000 greater than her loan balance, contrary to the terms of her mortgage agreement and federal law (which only requires borrowers to obtain flood insurance in an amount sufficient to cover their principal balance, where they live in a designated flood zone). Although Morris already carried flood insurance sufficient to cover her principal balance, the lawsuit alleges that Wells Fargo purchased a second policy for Morris’ property out of her escrow account, without her consent, at her expense. The lawsuit further alleges that Wells Fargo admittedly purchased this “force-placed” coverage through an affiliate insurance agency (Wells Fargo Insurance, Inc.), and reaped kickbacks, commissions, or other compensation for Wells Fargo and its affiliate insurance agency in the process.
In her class action Complaint, Morris seeks relief on behalf of herself and other borrowers across the country who have been similarly affected by Wells Fargo’s alleged conduct. Based on this alleged conduct, Plaintiff’s Complaint asserts that Wells Fargo violated the Truth and Lending Act (TILA), Real Estate Settlement Procedures Act (RESPA), and Pennsylvania Unfair Trade Practices and Consumer Protection Law (PAUTP-CPL). In addition, the Complaint alleges that Wells Fargo breached its contracts with borrowers and breached its fiduciary duties to borrowers in connection with the handling of escrow funds.
“In today’s economic environment, many homeowners are struggling to make their mortgage payments, and it is wrong for Wells Fargo to add to their burden by demanding excessive amounts of flood insurance that exceed Wells Fargo’s interest in their property, exceed federal requirements, and exceed the amount of insurance that borrowers agreed to carry when they originated their loans,” said Richter. “It is particularly egregious that Wells Fargo is accepting commissions or other compensation in connection with force-placed coverage,” continued Richter.
The case is entitled Morris v. Wells Fargo Bank, N.A., et al., No. 2:11-cv-00474-DSC (W.D.Pa.). Plaintiff is represented by Kai Richter, Paul Lukas, Michelle Drake, Rebekah Bailey, and Charles Frohman from Nichols Kaster, PLLP. Nichols Kaster has offices in Minneapolis, Minnesota and San Francisco, California, and is currently pursuing similar cases against JPMorgan Chase Bank, N.A. and Bank of America, N.A. Additional information is located at http://www.nka.com or may be obtained by calling Nichols Kaster, PLLP toll free at (877) 448-0492.