Wells Fargo Meets Settlement Obligations of Robo-signing Claims

by San Antonio Attorney

Wells Fargo & Co. based in San Francisco is paying out approximately $83 million to settle claims related to robo-signing foreclosure papers.

The deal pertains to lawsuits filed against the bank and its board of directors in 2011. They allegedly violated their fiduciary obligation to shareholders. The lawsuits were merged and formed a class action case.

A government filing showed that Wells Fargo has decided to settle to prevent further litigation, but it denies the claims to be true.

The bank is going to allocate $36.5 million for a new down-payment assistance plan for first-time homeowners in certain areas hit hard by the foreclosure catastrophe, which include St. Louis and Detroit. St. Paul and Minneapolis, where Wells Fargo is the biggest bank in terms of deposits, is excluded from the group.

Wells Fargo is also going to spend $6 million for borrowers’ counseling to help those who are delinquent on their home loans. Around $24.5 million will be allocated to integrate some computer systems for servicing mortgage loans into a single servicing platform of the bank. The platform is expected to be completed before the end of 2015. Wells Fargo will also pay $16 million to the lawyers representing the plaintiffs for fees and expenses.

When it became public that major banks are conducting mass robo-signing of foreclosure documents without checking if they were accurate, it shocked the nation. It became the focus of a $25 billion national mortgage accord in 2012 between the state and federal authorities and America’s five biggest banks.

As for the improvement of the banks’ services, the new standards imposed by the authorities require effective communication with customers, a single point of contact, sufficient number of staff and training, and proper procedures for handling paperwork in foreclosure cases.

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