Loan Servicing Fraud
What most people don’t think about are the many small ways that big banks like Wells Fargo, Citibank and JPMorgan Chase allegedly used to take advantage of borrowers by charging unnecessary loan servicing fees or inflating them to earn an illegal profit. Called “property preservation” services like “Broker’s Price Opinions” (BPO) or “drive-by” property inspections, these services are typically ordered when borrowers are late on their mortgage payments.
While being late on a mortgage payment is never a good idea, these banks allegedly violated their own loan servicing agreements and the regulatory guidelines by charging unnecessary fees or a hefty markup, up to 100% or more, on the third party services utilized to perform these services. To make matters worse, these banks often owned the third party vendors, adding to their financial gain – and allegedly attempted to hide the charges from borrowers by using vague language to describe the fees on loan statements.
As one might assume, these fees generated huge profits for the banks. But for the homeowners, many of whom may have already been under financial duress, the fees were just another blow that made it harder to get back on track, ultimately forcing some homeowners into foreclosure.
Baron & Budd has filed a class action on behalf of homeowners who were charged these allegedly improper fees. The class action is pending against Citibank, JPMorgan Chase and Wells Fargo.