Homeowners who filed bankruptcy between 2001 and March 2015 may receive funds from the Department of Justice as a result of a settlement reached with Wells Fargo. Pending Bankruptcy court approval, Wells Fargo will pay $81.6 million to bankrupt homeowners for denying them a chance to challenge mortgage payment increases during their bankruptcy proceedings.
The settlement with the Department Of Justice stems from Wells Fargo violating bankruptcy law by failing to send a notice about homeowners’ mortgage payment increases to bankruptcy courts. The law requires the notice to include disclosures to ensure that fees and charges by banks to homeowners in bankruptcy proceedings are accurate, the Justice Department said.
The settlement between Wells Fargo and the Justice Department’s also requires Wells Fargo to hire an independent compliance monitor and change its internal procedures to prevent a recurrence of the problem, the Justice Department said.
The bank was late in providing more than 100,000 notices to homeowners about mortgage payment changes and also did not timely perform more than 18,000 escrow analyses in cases involving nearly 68,000 accounts of bankrupt homeowners during the period.