Minion & Sherman
Call Us Today for a Free Confidential Consultation

Wells Fargo owes money to some Chapter 13 homeowners

When a New Jersey homeowner is behind on his or her mortgage and is otherwise overwhelmed financially, he or she may turn to the bankruptcy court for help. Filing Chapter 13 bankruptcy often allows homeowners the opportunity to keep their homes while reorganizing their financial lives and paying off their debts under the supervision of the court. In exchange, creditors are also bound by certain rules when dealing with these filers.

For example, mortgage lenders are required to provide Chapter 13 homeowners notice 21 days before adjusting their monthly payments. Failing to notify homeowners of the change, regardless of whether it is up or down, can prevent an accurate accounting of the costs borne by the borrower during bankruptcy. It was discovered that Wells Fargo Bank failed to provide the proper notices to some of its borrowers who are in bankruptcy.

The company admitted that it failed to notify approximately 100,000 borrowers of payment changes in a timely manner between Dec. 1, 2011 -- when the law went into effect -- and March 31, 2015. Approximately 68,000 were in bankruptcy. It also failed to do so in around 18,000 escrow analyses.

Wells Fargo agreed to pay a total of $81.6 million in a settlement of claims and to improve its computer system and training. Those changes come too late for some homeowners, however. Chapter 13 bankruptcy allows New Jersey homeowners the opportunity to keep their homes and deal with their other debts as well. If creditors fail to follow the rules set forth by the U.S. Bankruptcy Code, the homeowners' efforts could be sabotaged -- even if no malice is intended.

Source: ABC News, "Wells Fargo to Pay $81.6M to Homeowners in Bankruptcy", Alex Veiga, Nov. 5, 2015

No Comments

Leave a comment
Comment Information


At the law offices of Minion & Sherman, our New Jersey bankruptcy attorneys have been providing families with real solutions for more than 20 years.

Email Us For A Response

Contact Us Today for a Free Consultation

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

West Caldwell Office
33 Clinton Road
Suite 105
West Caldwell, NJ 07006

Toll Free: 866-915-1839
Phone: 973-559-5791
Fax: 973-882-0856
Map & Directions

Newark Office
201 Washington Street
Newark, NJ 07102

Toll Free: 866-915-1839
Phone: 973-559-5791
Fax: 973-882-0856
Map & Directions