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Jury acquits Wells Fargo concerning alleged mortgage practices

Even a bank as large as Wells Fargo can find itself entangled in litigation when it comes to attempts to collect on fees and debts. Six years after being sued in a class action, a jury has acquitted Wells Fargo of wrongdoing.

It was alleged that Wells Fargo provided kickbacks to a real estate firm in order to expand their mortgage practice. It is purported that the bank would gain access to loan originations by promising payments for any loan applications that were referred to Wells Fargo. The home owners also claimed to have been overcharged because of the fees that were supposedly split by Wells Fargo and the real estate business.

Banks have been under increasing scrutiny in recent years, and that has led to many lawsuits like the one mentioned above. The waiver of fees that the debtors complained about may seem like a small matter to some, but not receiving such fees can lead to banks losing tens of millions of dollars.

The media often reports upon the actions of banks, and usually the stories are spun to favor borrowers over lenders. Politicians have implemented measures that limit the remedies creditors have, and some of these measures have placed restrictions upon the way banks write up their loans and collect their debts.

It is because commercial collection practices are under such extreme scrutiny that one would be highly advised to retain legal counsel when engaged in the debt collection practice. Especially in California, debtors have become increasingly aware of what is and is not considered acceptable practices, and many debtors will not hesitate to report what they consider violations of state or federal law.

 

Source: American Banker, “Wells Fargo Acquitted in Kickback Lawsuit,” by Brian Browdie, June 10, 2013