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DannLaw: CFPB/Wells settlement is welcome, but big bank will continue to abuse homeowners

Class Action Lawsuit

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DannLaw founder Marc DannWhile the $3.7 billion settlement between Wells Fargo and the Consumer Financial Protection Bureau is welcome news, it doesn’t resolve all the issues surrounding the bank’s bad behavior–a point made by CFPB Director Rohit Chopra who noted that Wells’ rinse-repeat cycle of violating the law has harmed millions of American families.” He also said the company is a serial offender that puts one third of American households at risk of harm and that finding permanent resolution to this bank’s pattern of unlawful behavior is a top priority.
As most of you know, holding Wells accountable is also a top priority for DannLaw. We successfully represented clients in a class action suit related to the same issues outlined in the CFPB order and we are currently pursuing cases in California and New Jersey.
In addition, we continue to recieve calls and emails from homeowners who are involved in home mortgage disputes with Wells. If Wells is your lender or servicer and you believe you are being abused by the bank please contact DannLaw today by calling Lisa at 216-250-4012, emailing [email protected], or visiting https://dannlaw.com/contact/ to schedule a no-cost consultation that will enable us to determine if you are entitled to financial compensation.
Under the terms of the agreement with the CFPB Wells will provide $2 billion in compensation to consumers for engaging in the following activities:
• Unlawfully repossessing vehicles and bungling borrower accounts: Wells Fargo had systematic failures in its servicing of automobile loans that resulted in $1.3 billion in harm across more than 11 million accounts.
• Improperly denying mortgage modifications: During at least a seven-year period, the bank improperly denied thousands of mortgage loan modifications, which in some cases led to Wells Fargo customers losing their homes to wrongful foreclosures.
• Illegally charging surprise overdraft fees: For years, Wells Fargo unfairly charged surprise overdraft fees – fees charged even though consumers had enough money in their account to cover the transaction at the time the bank authorized it.
• Unlawfully freezing consumer accounts and mispresenting fee waivers: Customers affected by these account freezes were unable to access any of their money in accounts at the bank for an average of at least two weeks.
The terms of the agreement require Wells to contact its victims. Eligible consumers don’t have to take any action.
We wish we could say we believe Wells will now clean up its act. But we don’t. We know the bank is taking advantage of homeowner and consumers every day. If you are one of them, please contact DannLaw today wo we can protect your rights, your family and fight for the compensation you deserve.

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Wells FargoClaiming that Wells Fargo has engaged in a “…pervasive pattern and practice of placing Black Americans at a disadvantage in comparison to White Americans with respect to their applications for mortgage loans,” attorneys from DannLaw and the Zimmerman Law Offices filed a class action lawsuit against the giant bank in the United States District Court for the Eastern District of New York on Tuesday, April 6, 2022. The pleading in the case may be viewed here: Ifemoa Ebo v Wells Fargo.

Wells Fargo’s disturbing discriminatory behavior was documented in an extensive story published by Bloomberg in March. According to the report only 47% of Black homeowners who completed a refinance application with Wells Fargo in 2020 were approved, compared with 72% of White homeowners. By comparison other lenders had much smaller disparities in approval rates ranging from 7% to 12%. Bloomberg also noted that “Wells Fargo approved a greater share of applications from low-income White homeowners than all but the highest-income Black applicants, who had an approval rate about the same as White borrowers in the lowest-income bracket.”

Wells also discriminated against Blacks who applied for new mortgage loans. A review of publicly available data collected by the CFPB reveals that the bank approved applications submitted by Blacks at a rate 21% lower than those submitted by Whites. The disparity in approval rates at other lenders, including Chase, Quicken, United Wholesale Mortgage was approximately 10%.

Ms. Ebo’s case puts a face to Bloomberg’s reporting. In late 2021 she began searching for and found a new home in Brooklyn’s East Flatbush neighborhood. After signing a purchase agreement for $900,000 she submitted a mortgage loan application to Wells. At the time her credit score was approximately 800, her annual salary was $178,000, and she had no significant debt.

On November 1, 2021, Wells preapproved her for a loan of $883,698. The preapproval was set to expire on February 24, 2022. Ms. Ebo then immediately began working with the bank to secure final approval of the loan. She submitted all documentation requested by Wells, including W-2 forms, paystubs, and bank account statements in a timely fashion. On December 29, 2021, she received a “Commitment Letter” notifying her the application had been approved and advising her that she only needed to submit some additional documentation “in order to complete the final underwriting and funding of” the loan.

Things immediately went off the rails. In January and February Wells again asked for additional information much of which she had already submitted. She was also asked to provide items that were, according to the lawsuit, unnecessary, unduly burdensome, and irrelevant. For example, she was asked to explain why she made a monthly credit card payment of $290 to her own account and for a bank statement for a bank account that did not exist.

As Wells’ unnecessary and duplicative information requests continued into late February and March Ms. Ebo told the bank she was concerned her preapproval would expire before she received her loan even she was highly qualified and had supplied all documentation they had requested.

Her concern was justified. On March 22, 2022, the seller of the property cancelled the purchase contract with Ms. Ebo because Wells had not approved her financing and it was unclear if they ever would. She informed Wells of the seller’s decision that same day and accordingly, did not and never will receive the loan.

This is not the first time the lender has been accused of engaging discriminatory behavior. In 2012, the bank entered into a consent decree with the U.S. Justice Department to resolve claims it had unfairly steered Black and Hispanic borrowers into subprime mortgages and charged higher fees and interest rates than they did whites. At the time Wells paid $184 million to thousands of borrowers and agreed to adopt new compliance policies.

“Wells’ treatment of Ms. Ebo is unconscionable, illegal, but not surprising in light of the company’s history, Bloomberg’s reporting and the conversations we’ve had with others who were subjected to the bank’s outrageous practices,” DannLaw’s Javier Merino said. “Clearly, Wells has not been deterred by the laws that prohibit discrimination. Perhaps being held accountable in court will motivate them to change their ways and treat all applicants, regardless of race, equally and fairly in the future.”

The lawsuit seeks actual damages, statutory, and punitive damages, attorney fees and costs. For more information please contact Marc Dann at 330-651-3131.

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DannLaw founder Marc DannDannLaw Founder and former Ohio Attorney General Marc Dann today expressed satisfaction with the $12.9 million settlement that has been reached in the firm’s class action lawsuit against Well Fargo Bank, N.A. Judge Timothy Black of the Federal District Court for the Southern District of Ohio signed an order approving the settlement on January 25, 2022. More than 1,800 class members will receive between $1,000 and $19,000. While Wells agreed to the settlement, the company admitted to no wrongdoing in the matter.

DannLaw’s complaint in Ethan Ryder et. al. v Wells Fargo may be viewed and downloaded here1413000-1413765-wells complaint (2)

DannLaw and a number of other firms filed the suit in August 2019 on behalf of thousands of homeowners who qualified for but were not offered a home loan modification or repayment plan under the U.S. Department of Treasury’s Home Affordable Modification Program (HAMP) due to what Wells Fargo termed a “glitch” in the computer software the bank used to evaluate applications.

“In addition to being a major victory for consumers, this case underscores the importance of the fee-shifting provisions of the federal laws and regulations that govern the mortgage industry,” Dann said. “Those provisions enable us to fight for working-and middle-class families by holding big banks accountable when they act irresponsibly. Without fee shifting, clients like ours would be left with little or no recourse when lenders and servicers break the rules.”

Wells Fargo

Dann also noted that multi-million-dollar settlements strengthen consumer protection laws by deterring bad behavior in the financial services industry. “State and federal regulators simply don’t have the manpower or resources to pursue all the bad actors in the financial services sector,” Dann said. “The civil justice system empowers DannLaw and other consumer protection firms to police the industry and secure justice and just compensation for people who have been abused—no matter how many challenges we encounter or how much time and effort it takes to win.”

Dann praised the work of DannLaw Managing Partners Brian Flick, Dan Solar, and Javier Merino as well as the firms that co-counseled on the case. “I’m incredibly proud of our performance and our total commitment to our clients,” the former Ohio AG said. “The fact that a team of talented, tireless consumer lawyers can take on the biggest ‘white shoe’ law firms in the country and win demonstrates why the American legal system is the best in the world and why we will continue to use it to protect homeowners and consumers for years to come.”

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Atty. Andrew Wolf AnnouncementDannLaw founder and former Ohio Attorney General Marc Dann announced today that Attorney Andrew Wolf of North Brunswick, New Jersey has become an “Of Counsel” member of DannLaw’s Consumer Protection and Class Action Litigation Practice groups. Wolf, who has earned a reputation as one of the nation’s most effective consumer advocates will be based in DannLaw’s New Jersey/New York office.

“Andrew Wolf’s impressive level of experience, skill, and knowledge will significantly enhance our ability to both fight for middle and working-class families and to handle the influx of cases that will be generated in the coming months as millions of Americans exit mortgage forbearance and the federal foreclosure moratorium sunsets,” Dann said. “We could not have picked a better time to add a talented attorney with Andy’s level of expertise in individual and class action consumer protection law to our outstanding team.”

Wolf, who has resolved hundreds of individual consumer protection cases and been named Class Counsel in more than 135 state and federal class actions since entering private practice 24 years ago, said he eagerly seized the opportunity to join the team of attorneys that has pioneered the use of the nation’s most complex laws to secure justice for consumers and hold corporate wrongdoers accountable for their actions.

“When I opened my first office in 1997, I wrote down a simple mission statement – I am going to be a consumer protection attorney whose goal is to help as many people as possible who have been ripped off or taken advantage of in some way,” Wolf said. “I knew that if I did that I would make a decent living. After accomplishing that goal for 24 years and helping tens of thousands of consumers along the way, my new goal is to continue doing that good work at DannLaw.”

“Our familiarity with and respect for Andrew’s body of work along with the synergies that existed between our two firms served as the catalyst for the discussions that resulted in our teaming up,” Dann said. “I’m confident our new relationship will benefit Andrew, DannLaw, and our existing and future clients while causing nothing but headaches for unscrupulous lenders, scam artists, and corporate miscreants of all types. Andrew and I wouldn’t have it any other way.”

Andrew Wolf’s biography may be viewed here.

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DannLaw founder Marc DannIt seems like just weeks ago we saw bright light at the end of the COVID-19 tunnel. Turns out that thanks to people who refuse to be vaccinated and the resultant spread of the highly contagious Delta variant of the Coronavirus that light may once again be an oncoming train that puts both lives and the nation’s economic recovery at risk. To eliminate that risk, we encourage everyone who has not already been vaccinated to roll up their sleeves and get their shot ASAP.

Unfortunately, the economic slowdown, more than 400,000 people a week are now filing new jobless claims, combined with Ohio Mike DeWine and other governors’ decision to rescind federally funded unemployment benefits leave millions of people at risk for losing their homes via eviction or foreclosure.

With that in mind, this update includes vital information about evictions, forbearance, and foreclosure…

First, a few updates on what we’ve been up to:

DannLaw Leads the Fight to Restore $1 Billion in Federal Benefits that Governor Dewine turned down for Unemployed Ohioans

You may have read about our effort to have the supplemental unemployment benefits restored to over 330,000 Ohioans. We argued in court that  Governor Dewine lacked the legal authority to refuse benefits made available to unemployed Ohioans by the Federal Government. While we lost the first round in Franklin County Court we are urging that the 10th District Court of Appeals to reverse the trial Judge’s decision. We are optimistic that our legal arguments on behalf of over 330,000 Ohioans will prevail. This is important not only to unemployed people but also to all of us. Those benefits will (and would have) pumped over $100 Million a week into Ohio’s economy. That money would be spent to support small businesses and employed workers throughout the state.

Ryder v. Wells Fargo Class Action Settles for $12 million: DannLaw Leads the Way

DannLaw and its co-counsel recently helped their clients resolve a class-action lawsuit against Wells Fargo related to glitches in the bank’s loan modification program: Ryder v. Wells Fargo Bank N.A., No. 1:19-cv-00638-TSB (S.D. Ohio). Through the settlement, roughly 1,830 class members will receive over $ 9 million in direct cash payments. No claim forms are required–checks will be issued directly to the class members. The rest of the settlement amount will be used to pay settlement administration fees and expenses, attorneys’ fees and expenses, and class representatives’ incentive awards. A copy of the settlement agreement may be found here and Plaintiffs’ Unopposed Motion for Preliminary Approval, filed on July 2, 2021, may be viewed here.

Foreclosure Moratorium Ends

The federal government’s foreclosure moratorium ended on July 31, 2021. Under new rules issued by the Consumer Financial Protection Bureau, foreclosure actions may proceed if the borrower:

  • Has abandoned the property.
  • Was more than 120 days behind on their mortgage before March 1, 2020.
  • Is more than 120 days behind on their mortgage payments and has not responded to specific required outreach from the mortgage servicer for 90 days
  • Has been evaluated for all options other than foreclosure and it is determined that foreclosure is unavoidable.

While foreclosure proceedings may begin, foreclosure is not necessarily a done deal. DannLaw’s experienced foreclosure defense attorneys have helped hundreds of families save their homes and their financial futures. We know how to use the law to protect borrowers and to hold lenders who violate the rules accountable.

If you were in foreclosure when the moratorium went into effect last year or believe your servicer or lender is about to begin proceedings to take your home, do not delay, contact DannLaw today to arrange a no-cost, no-obligation foreclosure defense consultation.

If you even suspect that a foreclosure will be initiated or reinstated Do not delay, contact us TODAY!  Click here to schedule an in-person, video conference, or telephone appointment or call us at 877-475-8100.

In Forbearance? Now is the time to begin planning your exit strategy…

There is also good news for homeowners in forbearance. The CFPB recently issued new rules designed to protect homeowners as mortgage forbearance programs and the moratorium on foreclosures end. The CFPB said the regulations, which take effect August 31, 2021, will give borrowers who stopped making their mortgage payments time to explore their options and require servicers to “redouble their efforts to work to prevent avoidable foreclosures.”

Among other things, the new rules will:

  • Give borrowers a meaningful opportunity to pursue loss mitigation options. To ensure that borrowers can pursue foreclosure avoidance options, servicers must meet temporary special procedural safeguards before initiating foreclosures through the end of the year.
  • Allow mortgage servicers to help borrowers faster.Servicers can now offer streamlined loan modifications to borrowers without making borrowers submit all the paperwork for every possible option. These streamlined loan modifications cannot increase borrowers’ payments and have other protections built into them.
  • Tell borrowers their options.Servicers will be required to increase their outreach to borrowers before initiating foreclosure and tell borrowers key information about their repayment or other options when they communicate with borrowers who are exiting forbearance or struggling to make mortgage payments.

Along with issuing the new rules, the federal government is also:

  • Extending the application deadline for homeowners who have not previously requested forbearance from July 1, 2021 to September 30, 2021. Six months of forbearance is available for new filers.
  • Providing homeowners who entered forbearance between July 1, 2020, and September 30, 2020, one additional three-month extension that will allow them to recover financially before resuming mortgage payments.

 Now is the time to begin planning your forbearance exit strategy.

Remember: forbearance is not forgiveness. At some point, borrowers will be responsible for missed payments, taxes, and other fees. The phase-out of the forbearance program and end of the foreclosure moratorium means now is the time for borrowers to plan and execute an exit strategy.

Fortunately, the CFPB’s new rules provide a clear roadmap to the future for many homeowners. Let’s take a look at the options available based on the type of loan you have. As always, the experienced legal team at DannLaw is available to help assess your situation and select the path that is right for you and your family. To arrange a no-cost, no-obligation consultation please complete and submit our contact form. We are eager to help you.

Generally speaking, borrowers whose loans are backed by the federal government have four ways to repay balances that accumulated during forbearance:

Repayment Plan

This option might be right for you if…
You can afford to pay more than your regular mortgage payment for a few months.

How it works
A portion of the amount you owe will be added to the amount you pay each month.

Deferral or Partial Claim

This option might be right for you if…
You can resume your regular payments but can’t afford to increase your payments.

How it works
These options will either move your missed payments to the end of your loan or put them into a subordinate lien repayable only when you refinance, sell, or terminate your mortgage.

Loan Modification

This option might be right for you if…
You can no longer afford to make your regular mortgage payment.

How it works
Your payment can be reduced to an affordable amount and your missed payments will be added to the amount you owe. Your monthly payments could also be lower, but it could take longer to pay off your loan.

Lump-sum Reinstatement

This option might be right for you if…
You want to pay back all of your missed payments at once.

How it works
For most loans, servicers cannot require you to pay a lump sum. So, if you only hear about a lump-sum repayment, ask about other options.

Now let’s look at the options available by the type of loan:

Fannie Mae/Freddie Mac.

Fannie Mae and Freddie Mac do not require a lump sum payment at the end of forbearance and offer repayment plans, deferrals and partial claims, and loan modifications. Your servicer should reach out to you about 30 days before your forbearance plan ends to determine which program is best for you.

HUD/FHA

HUD/FHA  does not require lump sum repayment at the end of the forbearance. Servicers will determine if the borrower is eligible for FHA’s COVID-19 Recovery Standalone Partial Claim home retention option no later than at the end of the forbearance period. This program is for homeowners able to resume making their monthly mortgage payments and places arrearages into a subordinate lien that is repaid only when the home is refinanced, sold, or the mortgage is terminated. This lien does not accrue interest.

Borrowers who cannot resume making existing monthly mortgage payments may be eligible for the COVID-19 Recovery Modification which extends the term of the mortgage to 360 months at a fixed rate and targets reducing the monthly principal and interest portion of monthly mortgage payments.

USDA Rural Housing Service 

USDA does not require a lump sum payment at the end of the forbearance. Borrowers able to resume making regular payments should be offered an affordable repayment plan or term extension that defers arrearages to the end of the loan. Servicers should determine if borrowers unable to begin making regular payments qualify for other loss mitigation options.

VA Loans

Servicers of VA loans cannot require borrowers to make a lump sum payment at the end of forbearance. VA currently offers repayment plans and loan modifications and is now evaluating other options that may be made available in the future.

An important note for borrowers with private loans.

Homeowners whose mortgages are held by private lenders are especially at risk at the end of forbearance. If you are in forbearance, please stay in regular contact with your servicer because they have the ability to change the terms of your plan at any time. They can also require you to make a lump sum payment when forbearance ends. In addition, it is highly likely that any repayment options they offer will be designed to maximize their profit at your expense.

DannLaw’s experienced legal team knows how to deal with and hold private lenders accountable. If you have a private mortgage, don’t hesitate to contact us to arrange a free consultation so we can assess your situation and help ensure that your home and your finances don’t become victims of the pandemic.

For comprehensive information about forbearance, repayment options, and other COVID-19-related mortgage issues please visit the CFPB’s Help for Homeowners webpage.

For Renters

The good news: on Tuesday, August 3, the Centers for Disease Control and Prevention (CDC) extended the eviction moratorium that had expired on July 31 until October 3, 2021. The eviction ban is in effect for areas of the nation experiencing “substantial and high levels of community transmission” of the coronavirus. That means 90% of the nearly 11 million people behind in their rent are protected.

According to the Biden administration, the extension will give renters and landlords time to access the more than $46 billion in aid that has been approved by Congress. To date only $3 billion has been disbursed. That means lots of dollars are available to pay for rent, late fees, utilities, and moving costs. You can learn more about the assistance programs here.

If you are behind in your rent payments, we strongly urge you to take the following steps:

  1. Determine if you are eligible for assistance. To be eligible you must have an agreement to pay rent for your home or mobile home lot. You don’t need to have a signed lease, and your home could be an apartment, house, mobile home, or other place. In addition, these factors must apply to at least one member of your household:
  • They did or should qualify for unemployment benefits;
  • They lost income
  • They owe large expenses or had other financial hardships
  • They are experiencing housing instability, which means they are at risk of becoming homeless or would have trouble finding a stable place to live.

Eligibility is also determined by household income based on where you live. For detailed information about eligibility click here then select your state, territory, or tribe from the pulldown menu.

  1. If you are eligible, apply TODAY! Do not wait, take advantage of the help that is available as soon as possible by clicking here then select your state, territory, or tribe from the pulldown menu.
  2. Communicate with your landlord. If you are behind in your rent, please communicate with your landlord. If you have applied for aid tell them. If you are not eligible, keep them advised of your situation and explore the possibility of working out a payment plan that will enable you to stay in your home when the moratorium ends.
  3. Do not ignore letters or summonses issued by a court. When and if you receive an eviction notice or are summoned to court, you must respond. Ignoring letters or failing to appear practically guarantees that you will be evicted.

Thanks for taking the time to read this important update, and as always feel free to contact us should you have questions or need our help. https://calendly.com/mdann

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Marc Dann and Brian Flick of DannLaw, one of the nation’s leading consumer protection law firms and Attorney Andrew Engel of Advocate Attorneys, LLP, today filed suit in Cuyahoga County Common Pleas Court to force Governor Mike DeWine and Matt Damschroeder, Director of the Ohio Department of Jobs and Family Services to rescind their decision to terminate Ohio’s participation in the Federal Pandemic Unemployment Compensation (FPUC), Pandemic Unemployment Assistance (PUA),  Pandemic Emergency Unemployment Compensation (PEUC) programs. The first hearing in the case has been set for July 21, 2021 at 1:30 P.M. before Judge Michael P. Shaughnessy in Courtroom 16 C in the Cuyahoga County Justice Center, 1200 Ontario St, Cleveland, OH.

DeWine and Damschroder announced on May 13, 2021 that the federally-funded benefits would be cutoff on June 26, 2021. Ohio is one of 27 states governed by Republicans that decided to terminate the benefits early.

“Along with jeopardizing the personal and financial well-being of Ohioans who are struggling to recover from the pandemic, DeWine and Damschroder’s callous and politically-motivated decision to terminate the federal benefits represents a willful and blatant violation of Ohio law,” Brian Flick said.

According to the lawsuit, Ohio Revised Code Section ORC 4141.43(I) requires Damschroder to

“…cooperate with the United States department of labor to the fullest extent…[and] take such action…as may be necessary to secure to this state and its citizens all advantages available under the provisions of the “Social Security Act” that relate to unemployment compensation…”

The mandamus action asks the Cuyahoga County Common Pleas Court to:

  • Declare Governor Dewine and Director Damschroder to be in violation of their statutory duties under R.C. 4141.43(I) by terminating Ohio’s participation in PUA, PEUC, and FUPC benefits as of the week of June 26, 2021;
  • Enjoin Dewine, Damschroder, their officers, employees, and agents, from withdrawing the State of Ohio from unemployment benefits offered through the CARES Act;
  • Order Dewine and Damschroder to immediately notify the United States Department of Labor of Ohio will participate in the programs for their duration;
  • Issue a peremptory writ of mandamus requiring the Defendants’ perform their statutory duties required by ORC 4141.43(I) and immediately take all action necessary to reinstate Ohio’s participation in all federal unemployment insurance benefit available from the United States Department of Labor.

DannLaw and Advocate Attorneys are also seeking a Temporary Restraining Order and Preliminary Injunction enjoining Dewine and Damschroder from denying Ohioans

the right to receive FPUC benefits.

The mandamus action may be viewed here: Bowling Candy 2021 07 06 First Amended Complaint TO FILE

The motion for a temporary restraining order may be viewed here: Bowling Candy 2021 07 05 Motion for TRO Final

Similar suits have been filed in three other states: Indiana, Maryland, and Texas. On June 25 Indiana Superior Court Judge John Hanley ruled that the state must continue paying the benefits and said “Indiana law recognizes the importance of these benefits. Indiana law requires the State to accept these benefits.” Court action is pending in Maryland and Texas.

“Indiana’s statutory language is very similar to Ohio’s,” Atty. Dann noted. “We believe we are right on the law an absolutely right as it relates to public policy that protects the interests of the people of the state of Ohio.”

For more information, please contact Atty. Marc Dann at 216-373-0539 or by emailing [email protected]