By Erik Larson and Laura J. Keller, Bloomberg News
Wells Fargo & Co. agreed to pay $50 million to settle a class-action lawsuit by almost 300,000 homeowners who claimed they paid inflated fees for a broker service required on delinquent mortgages at risk of foreclosure.
The deal won final approval on April 11 by U.S. District Judge Yvonne Gonzalez Rogers in Oakland, California, the law firm Baron & Budd said Monday in a statement. The homeowners will get about $120 each — more than double the fee markup they paid for so-called broker price opinions, the law firm said.
The settlement comes as the bank continues to manage the fallout from a scandal over millions of fake deposit and credit- card accounts, which has put pressure on the lender by discouraging potential customers and fueling costs related to compliance. The lender’s embattled community bank, where the scandal emanated, weighed on overall first-quarter results, leading the bank to miss analysts’ estimates last week.
“While we believe our practices related to broker price opinions were proper and disagree with the claims in the lawsuit, we have agreed to settle the matter to avoid further litigation,” the San Francisco-based bank said in a statement emailed by spokesman Tom Goyda.
The lawsuit, filed in 2010, covered behavior that took place from 2005 to 2010, according to court filings. Banks use price opinions from real estate brokers when they’re assessing actions to take on a delinquent mortgage, including possible foreclosure. The plaintiffs alleged that Wells Fargo fraudulently concealed charges for marked-up opinions.
The settlement was announced in October.
The case is Bias v. Wells Fargo & Co., 4:12-cv-00664, U.S. District Court for the Northern District of California (Oakland).
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