Citing a recent investigation by NBC News, two US senators asked Wells Fargo’s chief executive to answer comprehensive questions about the bank’s practice of pausing mortgage payments for borrowers without their consent under a federal program designed to assist homeowners financially disadvantaged by COVID-19.
Senators Elizabeth Warren of Massachusetts and Brian Schatz of Hawaii, both Democrats and members of the Senate Banking Committee, wrote a letter on July 29 requesting information and documents about Wells Fargo’s policy of placing clients on so-called tolerance they did not request. .
The conduct can harm borrowers’ credit reports by showing that they are not making payments, even when they are, and can prevent them from refinancing their mortgage loans to take advantage of lower interest rates.
The senators’ letter said the bank “appears to be incapable of self-government,” noting that reports of borrowers who were placed in leniency programs they did not want “raise even more questions about the disability of Wells Fargo and his leadership team. to comply with the law and the needs of its clients. “
The letter, obtained exclusively by NBC News, was addressed to Charles W. Scharf, the relatively new CEO of Wells Fargo. He has been on the job since last fall; The bank’s two previous CEOs resigned following revelations in 2016 that Wells Fargo opened millions of accounts for unsolicited clients.
“Wells Fargo may have gotten a new CEO, but the long-standing culture, which is very broken and repeatedly rips off its customers, is deep,” Warren said in a statement to NBC News. “We want answers on why the bank has been putting non-delinquent borrowers on mortgage leniency without their consent, especially during one of the worst economic crises in history.”
A Wells Fargo spokeswoman declined to comment on the letter, but provided the following statement to NBC News.
“During the early stages of the crisis, we took steps to provide relief to mortgage and home equity clients that we learned were affected by COVID,” the spokeswoman said.
“Suspended clients received notices of that action through multiple channels, and we removed them from leniency upon request. In the spirit of providing assistance, we may have misinterpreted clients’ intentions in a small number of cases. In those cases Limited, we are working directly with clients to ensure they are not harmed in any way. “
Under the CARES Act, which provides help on loans backed by government-sponsored companies Fannie Mae, Freddie Mac, Ginnie Mae, and others, borrowers hurt by COVID-19 can apply to suspend their mortgage payments for up to one year. The amounts you owe during the period are either added to the ends of the loans or paid off earlier. No additional fees, interest, or penalties can be accrued on the loans while they are lenient.
But in two separate stories released this month, NBC News reported that borrowers in at least 14 states: Alabama, Arizona, California, Florida, Kansas, Louisiana, Michigan, Missouri, New Hampshire, New Jersey, New York, North Carolina, Texas and Virginia – had described how Wells Fargo had unintentionally put her on leniency plans.
In some cases, borrowers whose mortgage payments were paused by the bank said they had clicked on COVID-related pages on their website or requested information about assistance programs, but had never registered. Some said they continued to make their payments to the bank.
“I click on this button and the next thing I know, I get something that says I’m deferred and I can’t reverse something I didn’t even want,” Tammi Wilson, a Wells Fargo customer, told NBC News.
In recent years, Wells Fargo, the country’s fourth largest bank, has been pressured to open unsolicited bank accounts and credit cards for customers. It also forced others to buy auto insurance that they did not need and, in some cases, was not informed.
The July 29 letter asks Wells Fargo to detail the borrowers he proved they did not request. The letter also asks what actions the bank has taken to compensate borrowers for any damage their actions have caused and whether Wells Fargo has worked to correct the information it provided to consumer credit agencies about the tolerance programs it had placed. to customers against their wishes.
The letter also asked whether Wells Fargo was compensated for tolerance activities and, if so, how much.
Senators gave the bank until August 12 to respond to its request for information.
