Baron and Budd attorneys, led by a team in Los Angeles, filed a lawsuit on February 10, alleging that Wells Fargo and JPMorgan Chase charged excessive default service fees.
""Wells Fargo and Chase executives conspired to increase profits in any way they can, even if that meant deceiving homeowners who were losing out on the American dream,"" said attorney Roland Tellis in a statement. ""In addition to charging unnecessary and marked-up fees, the banks concealed the fees through cryptic wording.""
One of the fees charged to borrowers who pay late is the broker's price opinion (BPO), which is used to help the lender price the property for foreclosure.
According to the suit, while federal law allows mortgage servicers to charge borrowers BPO fees, Wells Fargo and Chase marked up the charges or performed unnecessary services to make a profit, which is not permissible.
The suit also claims that the fees are disguised on statements as other charges, miscellaneous fees, or corporate advances.
While federal law allows lenders to charge these BPO fees, they are not allowed to mark up the charges or perform unnecessary services and make a profit, which is what Wells Fargo and Chase have done, according to the suit.
The suit states that Wells Fargo and Chase combined service about 25 percent of all U.S. mortgages.
Ã¢â‚¬Å“We are currently reviewing the complaint to better understand the facts of the filing,Ã¢â‚¬Â said a Wells Fargo spokesperson to DS News.
Chase had no comment on the lawsuit.