Wells Fargo (Headquarters)

Customer Complaints Summary

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• Government Actions

  The following describes a government action that has been resolved by either a settlement or a decision by a court or administrative agency. If the matter is being appealed, it will be noted below.

  On February 9, 2012 the US Department of Justice announced that the Federal Government and 49 State Attorneys have reached a $25 billion dollar agreement with the five largest mortgage servicers, including Wells Fargo to address mortgage loan servicing and foreclosure abuses. The agreement provides substantial financial relief to homeowners and establishes significant new homeowner protections for the future.

  For details regarding the agreement, go to http://www.justice.gov/opa/pr/2012/February/12-ag-186.html.
  

  The following describes a government action that has been resolved by either a settlement or a decision by a court or administrative agency. If the matter is being appealed, it will be noted below.

  On July 12, 2012 the United States Department of Justice reached a settlement agreement with Wells Fargo. The settlement is still subject to court approval and alleges that between 2004 and 2008, Wells Fargo discriminated by steering approximately 4,000 African American and Hispanic wholesale borrowers, as well as additional retail borrowers, into subprime mortgages. The United States also alleges that, between 2004 and 2009, Wells Fargo discriminated by charging approximately 30,000 African American and Hispanic wholesale borrowers higher fees and rates than non Hispanic white borrowers because of their race or national origin rather than the borrowers' credit worthiness or other objective criteria related to borrower risk.

  The Wells Fargo Business Practice allowed its loan officers and mortgage brokers to vary a loan's interest rate and other fees from the price it set based on the borrower's objective credit related factors. This pricing discretion resulted in African American and Hispanic borrowers paying more. The complaint alleges that Wells Fargo was aware the fees and interest rates it was charging, discriminated against African American and Hispanic borrowers, but the actions it took were insufficient and ineffective in stopping it.

  The United States complaint also alleges that, as a result of Wells Fargo's policies and practices, qualified African American and Hispanic wholesale borrowers were placed in subprime loans rather than prime loans. Subprime loans generally carried higher cost terms, such as pre-payment penalties and adjustable interest rates that started with low initial teaser rates, and then increased significantly after two or three years, often making the payments unaffordable and leaving borrowers at a much higher risk of default or foreclosure.

  The proposed settlement provides for an independent administrator to contact and distribute payments of compensation at no cost to borrowers whom the Justice Department identifies as victims of Wells Fargo's discrimination. The department will make a public announcement and post contact information on its website once an administrator has been chosen.

  This case was prosecuted by the Fair Lending Unit in the Civil Rights Division's Housing and Civil Enforcement Section in Conjunction with the US Attorney's Office for the District of Columbia.

  
  

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• Advertising Review

  BBB has nothing to report concerning Wells Fargo's advertising at this time.

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