Wells Fargo in $94 million settlement over mortgage forbearance during pandemic

Source: Reuters

“Wells Fargo & Co has reached a $94 million settlement to resolve class-action claims it sent more than 200,000 struggling mortgage borrowers into forbearance during the COVID-19 pandemic without their consent. The proposed settlement was filed last week in the federal court in Columbus, Ohio, and requires a judge’s approval. It resolves claims that Wells Fargo unilaterally decided to provide forbearances to customers who inquired about their mortgages or expressed hardship, but had not explicitly requested and did not want relief. Forbearance temporarily suspends the obligation to make mortgage payments. Customers said Wells Fargo’s decision damaged their credit, making it harder or more expensive to borrow, and impeding their ability to refinance at historically low interest rates. They also said the decision violated the CARES Act, the March 2020 federal economic stimulus addressing COVID-19, which provides for forbearances at borrowers’ request.” (09/14/22)