A new class action lawsuit accuses Wells Fargo of making unauthorized changes to home loans held by customers in bankruptcy. The changes, which typically lowered monthly mortgage payments, appeared to benefit borrowers at first- but the details reveal the changes would extend the terms of the borrowers’ loans for decades, which means they would have monthly payments for far longer and owe the bank much more.
Any change to a payment plan for a person in bankruptcy is subject to approval by the court and the other parties involved. But according to the lawsuit, Wells Fargo went ahead and made these changes to the home loans without such approval.
This puts borrowers in bankruptcy at risk of defaulting on the commitments they have made to the courts and could make them vulnerable to foreclosure. According to court documents, Wells Fargo has been putting through these un-requested changes to borrowers’ loans since 2015.
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