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Wells Fargo stuck mortgage borrowers with extra fees, suit says

A former Wells Fargo mortgage banker who worked in Beverly Hills alleged in a lawsuit this week that the bank falsified records so it could blame delays on borrowers — and that it fired him for trying to report the practice. The legal action follows a months-long internal investigation into the alleged abusive practices, one that contributed to an executive shakeup in the San Francisco bank’s mortgage business. When borrowers apply for mortgages, they are typically guaranteed a set interest rate — assuming the loan is approved within a certain period, often 30 to 45 days. If approval takes longer, borrowers can still get the promised rate, but there are financing costs associated with extending guarantees. Alaniz’s complaint mirrors claims made by another former Wells Fargo mortgage banker, Frank Chavez, in a letter sent last year to members of the House Financial Services Committee and the Senate banking committee. Other mortgage lenders cut back around that time, too, as the volume of mortgage applications declined following a surge of refinancing driven by record low interest rates.

Article by By James Rufus Koren (c) Business and Technology News - Read full story here.