Wells Fargo stuck mortgage borrowers with extra fees, whistle-blower’s lawsuit says

As Wells Fargo & Co. continues to be hit with fallout from its sham-accounts scandal, the bank is facing allegations that it put the screws to customers in yet another way: by slapping them with fees for delays in processing mortgage applications.

A former Wells Fargo mortgage banker who worked in Beverly Hills alleged in a lawsuit this week that the bank falsified records so it could blame holdups on borrowers — and that it fired him for trying to report the practice.

The legal action follows a months-long internal investigation into the alleged abusive practices, one that contributed to an executive shake-up in the San Francisco bank’s mortgage business. ProPublica first reported on the alleged improper fees in January.

When borrowers apply for a mortgage, they are typically guaranteed a set interest rate — assuming the loan is approved within a certain time frame, often 30 to 45 days. If approval takes longer, the borrower can still get the promised rate but there are financing costs associated with extending the guarantee.
Read on.

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