Accusing Wells Fargo & Co. of reneging on a sweeping mortgage-modification deal, a lawyer for troubled homeowners is trying to reopen a case involving risky "pick-a-pay" loans written during the housing bubble.
Legal filings last week claimed Wells Fargo failed to provide wide-ranging reductions of loan balances to delinquent borrowers as it had promised two years ago when it settled a combined national class-action suit. A bank spokeswoman strongly disputed the claim, saying it was riddled with errors.
The litigation illustrates how lawsuits continue to dog major home lenders more than five years after the mortgage industry imploded, including recent challenges to certain cases the banks thought had been put to rest.
The original lawsuits over pick-a-pay, or pay-option, mortgages contended that the loans were issued with inadequate notice to borrowers that the amount owed would rise if they chose the lowest payment among four options. The loans were made by banks later acquired by Wells Fargo.
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To consult Attorney Jeffrey K. Berns who represents the plaintiffs in the case, click here.
We also spoke to Attorney Stephen Golden, who took on Niko Black's case, about the options that are now available for homeowners. To speak with him, click here.