Settlement approved: Wells Fargo customers will get $50 million for overcharged mortgage fees
Class action settlement over Broker Price Opinions is finalized
Borrowers who had a mortgage serviced by Wells Fargo between May 6, 2005 and July 1, 2010 will soon receive their share of a $50 million settlement stemming from allegations that Wells Fargo overcharged borrowers for Broker Price Opinions during that period.
The settlement, which was initially announced in October, stems from a class action lawsuit against Wells Fargo that claimed that the bank violated the law by charging borrowers more than the amount Wells Fargo paid for BPOs.
The lawsuit claimed that Wells Fargo charged certain borrowers between $95 and $125 for the BPOs, instead of the typical cost of $50 or less.
According to details provided by the plaintiffs’ attorneys, the lawsuit is now finalized, as the settlement received final approval last week from U.S. District Judge Yvonne Gonzalez Rogers in the Northern District of California.
Now that the settlement is finalized, each of the nearly 290,000 members of the class will automatically receive a check for their portion of the settlement within 60 days.
According to the law firm of Baron & Budd, which represented the plaintiffs, the average payout per borrower will be roughly $120 – more than double the fee markup each plaintiff paid.
Wells Fargo said in October, and again in a statement to HousingWire on Monday, that it believes it did nothing wrong, but chose to settle the suit anyway.
“We believe our practices related to Broker Price Opinions were proper and disagree with the claims in the lawsuit, but we agreed to settle the matter to avoid further litigation,” a Wells Fargo spokesperson said in a statement to HousingWire.
The settlement applies to any borrower who had a mortgage serviced by Wells Fargo during the time period referenced and paid the elevated price for the BPO, the lawyers said.
Borrowers who qualify do not need to make a claim for their share of the settlement funds. A check will be mailed to class members at their last known address in Wells Fargo’s records, the attorneys state.
“For nearly five years, our partners Dan Alberstone and Roland Tellis and their team, worked tirelessly to secure this considerable settlement,” said Russell Budd, president and managing shareholder of Baron & Budd. “The settlement they secured sends a powerful message that class action cases can provide meaningful, tangible recovery to hundreds of thousands of class members. I’m very pleased to know that our plaintiffs will receive compensation soon.”