This lawsuit by Wells Fargo against Wachovia was just settled.
We’re seeing a ton of these civil suits to try to sort out the mess of the housing crash in 2007. Many clients feel they were sold a bill of goods when they were offered high yield risky mortgage-backed securities that turned out to be junk.
Have you ever heard of pick-a-payment mortgages? These mortgages gave people flexibility in the early years of the loan and let them choose how much they wanted to pay off that month.
Dow Jones says: Wells Fargo & Co. (WFC) has reached an agreement with Connecticut over allegedly deceptive marketing of mortgage products by Wachovia Corp. and Golden West Financial Corp., two troubled lenders that Wells Fargo acquired in 2008.
As part of the agreement, the San Francisco-based bank will consider roughly 1,535 eligible Connecticut homeowners for loan modifications. The bank will also provide Connecticut with $741,465 to support the state’s foreclosure prevention efforts.
The allegations date to claims that Wachovia and Golden West violated state consumer protection laws by failing to fully explain so-called “pick-a-payment” loans, specifically that borrowers choosing to make only minimum payments on such loans would in fact inflate the balance of their loans.