Wells Fargo Subject of Another Scandal, Accused of Manipulating Loan Terms

By:
Chris Gaetano
Published Date:
Jun 15, 2017
Wells Fargo

Troubled bank Wells Fargo, still reeling from revelations that it signed millions of people up for accounts they never asked for, is at the center of another scandal, as a class action lawsuit has accused the company of making loan modifications without the borrower's knowledge or consent, according to Reuters. The issue specifically concerned account holders who were entering bankruptcy. Wells Fargo's mortgage business is accused of putting through unauthorized changes that, while leading to a lower monthly rate, extended the term of the loan by decades, meaning they would be making these monthly payments for much longer, meaning they would ultimately be paying the bank much more, according to Reuters. While such modifications are meant to be done only with the approval by courts and other parties, the lawsuit contends that Wells Fargo just went ahead and did it anyway. They would then, according to the suit, say that the borrowers had requested or approved the loan modification, which would in turn make the trustees overseeing the bankruptcy to accept the change. 

Wells Fargo's legal counsel has denied these claims, saying no such practice exists. 

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