Wells Fargo (WFC) Friday agreed to spend a $50 million settlement arising out of allegations the bank bilked roughly 250,000 homeowners by padding appraisal charges.
The settlement, which still awaits approval by an Oakland, Calif. court, is centered around alleged appraisal markups the banks charged to homeowners who defaulted on mortgage loans. Property owners who default are traditionally charged costs for appraisals. However the private lawsuit filed in 2012 suggested Wells Fargo overcharged these property owners, assessing total costs of $95 to $125, based on the lawsuit. The actual cost for the appraisals is often $30 or less according to National Association of BPO Specialists, that is cited in the lawsuit. The costs have been hard to detect since they were shown as "other charges," the lawsuit says.
This settlement piles on major of other legal issues Wells Fargo is facing following this year's scandal exactly where a huge number of bank staff allegedly opened accounts unknown to buyers in order to reach sales objectives.
Tom Goyda, a spokesman for Wells Fargo, says the bank stands by its procedures and is settling this suit to prevent prolonged litigation. He says the settlement is a part of a private class action lawsuit exactly where the payment goes to members in the class but additionally legal fees and attorney costs. "While we believe our practices related to Broker Price Opinions had been correct and disagree with all the claims within the lawsuit, we've got agreed to settle the matter to avoid additional litigation," Goyda told USA Nowadays.
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