In a separate action involving Wells Fargo, a U.S. Court of Appeals yesterday held that the bank must face lawsuits by home loan borrowers for refusing to offer them permanent mortgage modifications.
The federal government’s 2009
“The program seems to have created more litigation than it has happy homeowners,” the judges said in yesterday’s decision.
Reversing a lower-court dismissal of two separate lawsuits, the panel rejected the conclusion Wells Fargo was only bound if it had actually offered the borrowers a fully executed copy of a modification agreement.
A Chicago-based federal appeals court reached a similar conclusion last year, the judges said.
Wells Fargo claimed the borrowers hadn’t met all the temporary plan qualifications and that it was within its rights to not offer them permanent adjustments, according to the unanimous ruling.
The appeals court “did not rule on the merits the underlying case and found only that the district court should consider the arguments put forth by the plaintiffs,” Tom Goyda, a spokesman for the bank, said in an email. “Wells Fargo has strong defenses to those arguments and is prepared to present its case.”
