Tuesday, February 21, 2012

Suit: Banksters "Fraudulently Conceal Their Unlawful Assessment Of Improperly Marked-Up Or Unnecessary Fees For Default-Related Services"

In San Francisco, California, Courthouse News Service reports:

  • Wells Fargo Bank and J.P. Morgan Chase charge homebuyers who go into default inflated fees and interest rates, customers say in a federal RICO class action. Lead plaintiff Latara Bias claims the defendants, including Chase Home Finance, service almost 20 million mortgage loans, approximately 25 percent of the home loans made in the United States.

  • The class claims the defendants use an automated mortgage loan management system, and subsidiaries, to "fraudulently conceal their unlawful assessment of improperly marked-up or unnecessary fees for default-related services, cheating borrowers who have least afford it."

  • The plaintiffs concede that when mortgage borrowers go into default, it is natural for lenders to act to protect their interest in the property. "However, lenders are not permitted to mark up the fees for such services to earn a profit," the complaint states.

  • "Nor are lenders permitted to assess borrowers' accounts for defaulted-related service fees that are unreasonably and unnecessary. Nevertheless ... using false pretenses to conceal the truth from borrowers, that is precisely what defendants do. In effect, to generate hearty profits, defendants have substituted inflated interest rates with inflated fees.

For more, see Homebuyers Sue Banks in RICO Class Action.

For the lawsuit, see Bias, et al. v. Wells Fargo & Company, et al.

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