A settlement has been reached in a class-action lawsuit accusing Wells Fargo & Co. of overcharging distressed borrowers for property valuations.
The
class action was originally filed in February 2012 against the San Francisco-based company and its bank subsidiary, Wells Fargo Bank, N.A.
The plaintiffs are borrowers who fell behind on their mortgage payments and had broker price opinions performed on their properties for Wells Fargo.
According to the plaintiffs,
Wells Fargo unlawfully marked up the BPO fees. The marks up were allegedly concealed by funneling the orders through an internal unit, Premiere Asset Services, to make it appear the inflated fees were legitimate, pass-through vendor charges.
Case documents filed Friday with a federal court in Oakland, California, indicate that Wells Fargo agreed to a settlement.
The settlement will cost the bank $50 million. Plaintiffs reportedly will receive at least the the amount of the mark up on the BPO fees.
A spokesman for Wells Fargo said in a written statement, “While we believe our practices related to Broker Price Opinions were proper and disagree with the claims in the lawsuit, we have agreed to settle the matter to avoid further litigation.”
Roland Tellis, attorney for the plaintiffs, didn’t respond to a request for a statement.
A preliminary approval hearing has been requested before U.S. District Judge
Yvonne Gonzalez Rogers on Dec. 6.
