A Damascus, Oregon, man claims he was terminated by Wells Fargo & Co. in 2014 after he discovered the bank was repeatedly collecting on mortgage loans for which it did not have the proper documentation.
When Duke Tran, 54, complained about the practice, he claims he was told to lie to customers. When he resisted, the bank fired him in November 2014, Tran said.
In a whistleblower lawsuit unsealed a week ago, Tran claims Wells also defrauded the U.S. government. He argues the bank illegally collected hundreds of millions of dollars in federal foreclosure-prevention funding for loans the bank knew lacked proper documentation.
Wells Fargo denies any wrongdoing.
Tran’s lawsuit recalls the foreclosure wars that accompanied the 2008-11 housing crash and recession. Some of the banks whose aggressive subprime lending helped cause the crash then let loose a wave of home foreclosures without recent precedent. It did so despite widespread protests that the lenders lacked the proper documents to prove they had standing to legally repossess the homes.
Last month, Wells Fargo paid a record $1.2 billion to settle a U.S. Department of Justice lawsuit claiming the bank had for years engaged in reckless underwriting and lending and then relied on government mortgage insurance to pay for the loans when they went bad.
Tran’s wrenching transition from happy 10-year veteran at Wells Fargo to self-proclaimed whistleblower began in December 2013 when he fielded a call from a couple terrified they were going to get foreclosed out of their home. They were overdue on their second mortgage and Wells Fargo was demanding a balloon payment.
Tran, who worked at the bank’s Beaverton, Oregon, call center, checked and checked again. He claims he could find no trace of the couple’s loan in the bank’s computer system and he told the couple so.
Tran says his bosses were not happy.
Three months later, on April 21, 2014, Tran and the rest of his team received an email from a supervisor telling them that full disclosure was a bad idea.
“Please remember when you come across a situation where we have a lost contract, deed, any type of document, really, but especially when It relates to securing a property, we are not to share that with the customer,” reads the email, which Tran submitted into the court file.
Tran was troubled.
The first-generation Vietnamese-American and volunteer in the U.S. Army Reserve considered it illegal and unethical for the bank to threaten foreclosure when it didn’t have the mortgage contract in question.
“The company told me to lie about that,” he said in an interview. “I don’t think that’s right, for the customers, for the company or the entire country.”
Tran continued to question the policy.
In response, he claims, his managers grew increasingly critical of his performance.
On Nov. 24, 2014, Wells Fargo fired him.
Last June, Tran filed the whistleblower suit alleging bank managers illegally retaliated against him. He filed the suit also on behalf of the federal government, alleging Wells Fargo violated the False Claims Act when it collected $1.4 billion in government foreclosure prevention funding.
Wells Fargo spokesman Tom Goyda said the bank violated no law. “We believe that our claims submitted to the government under the Home Affordable Modification Program were proper and were subject to substantial oversight and review, and will be prepared to defend our record against the claims in the lawsuit.”
In whistleblower suits like this, the Department of Justice investigates and considers whether to intervene in the case. It declined to do so in this matter.
Michael Fuller, Tran’s Portland lawyer, said his client is hopeful that other Wells Fargo employees or former employees will come forward and tell their stories.
