Homeowners who argued Wells Fargo Bank tricked them into loan-modification programs offering to stop foreclosure in return for payments and foreclosed anyway, keeping the homeowners contingent payments, had their suit survive a legal challenge from Well Fargo this week in San Francisco federal court.
U.S. District Judge Joseph Spero, rejected claims for breach of contract but upheld allegations that the Wells Fargo debt-collection practices were UNFAIR DECEPTIVE AND FRAUDULENT!
The lead plaintiffs claimed that, after they defaulted on their mortgage, Wells Fargo offered to freeze foreclosure proceedings against them if they signed a modified loan agreement and made payments. However, after they signed the loan and made payments over four consecutive months, the bank still foreclosed on their home!
Wells Fargo asked the district court to throw out the suit, Judge Spero instead found that the homeowners may be entitled to damages under California's Rosenthal Act, which protects consumers from improper debt-collection practices!
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