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Wells Fargo Bank JP Morgan Chase Face Interest Rates Lawsuit
San Francisco, CA: Wells Fargo Bank and JP Morgan Chase are facing a federal class action over alleged violations of the Racketeering Influenced and Corrupt Organizations (RICO) Act. The lawsuit alleges the defendants charged inflated fees and interest rates to homebuyers who go into default.
Filed by lead plaintiff Latara Bias, the class action alleges the defendants, including Chase Home Finance, use an automated mortgage loan management system, and subsidiaries, to "fraudulently conceal their unlawful assessment of improperly marked-up or unnecessary fees for default-related services, cheating borrowers who have least afford it."
While lenders need to act to protect their interest in a property when a mortage holder defaults, lenders are not permitted to mark up the fees for such services to earn a profit,"according to the lawsuit. "Nor are lenders permitted to assess borrowers' accounts for defaulted-related service fees that are unreasonable and unnecessary. Nevertheless using false pretenses to conceal the truth from borrowers, that is precisely what defendants do," according to the lawsuit.
"In effect, to generate hearty profits, defendants have substituted inflated interest rates with inflated fees. Defendants formed enterprises – associations of subsidiaries and affiliated companies – and designed schemes to disguise hidden mark-ups, and unnecessary fees so that they could earn additional, undisclosed profits. Through these unlawful enterprises, defendants mark up the fees charged by vendors, often by 100 percent or more, and then, without disclosing the mark-up, assess borrowers' accounts for the hidden profits. In connection with their schemes, defendants also have a practice of routinely assessing fees for default-related services, even when they are unnecessary and inappropriate. Employing this strategy, defendants are able to quietly profit from default-related service fees at the expense of struggling consumers. Indeed, in the fourth quarter of 2011 alone, defendant Wells Fargo & Co. saw a 20 percent increase in profits,"the class action claims.
"Defendants are aware that it is improper to mark up the fees assessed on borrowers' accounts for default-related services. Therefore, defendants fraudulently conceal these fees on borrowers' accounts, omitting any information about defendants' additional profits, by identifying them on mortgage statements only as 'other charges,' 'other fees,' 'miscellaneous fees,' or 'corporate advances.'"
The class seeks declaratory and injunctive relief, restitution and disgorgement, and compensatory and treble damages for unfair competition, unjust enrichment and RICO conspiracy.
Published on Feb-27-12
Filed by lead plaintiff Latara Bias, the class action alleges the defendants, including Chase Home Finance, use an automated mortgage loan management system, and subsidiaries, to "fraudulently conceal their unlawful assessment of improperly marked-up or unnecessary fees for default-related services, cheating borrowers who have least afford it."
While lenders need to act to protect their interest in a property when a mortage holder defaults, lenders are not permitted to mark up the fees for such services to earn a profit,"according to the lawsuit. "Nor are lenders permitted to assess borrowers' accounts for defaulted-related service fees that are unreasonable and unnecessary. Nevertheless using false pretenses to conceal the truth from borrowers, that is precisely what defendants do," according to the lawsuit.
"In effect, to generate hearty profits, defendants have substituted inflated interest rates with inflated fees. Defendants formed enterprises – associations of subsidiaries and affiliated companies – and designed schemes to disguise hidden mark-ups, and unnecessary fees so that they could earn additional, undisclosed profits. Through these unlawful enterprises, defendants mark up the fees charged by vendors, often by 100 percent or more, and then, without disclosing the mark-up, assess borrowers' accounts for the hidden profits. In connection with their schemes, defendants also have a practice of routinely assessing fees for default-related services, even when they are unnecessary and inappropriate. Employing this strategy, defendants are able to quietly profit from default-related service fees at the expense of struggling consumers. Indeed, in the fourth quarter of 2011 alone, defendant Wells Fargo & Co. saw a 20 percent increase in profits,"the class action claims.
"Defendants are aware that it is improper to mark up the fees assessed on borrowers' accounts for default-related services. Therefore, defendants fraudulently conceal these fees on borrowers' accounts, omitting any information about defendants' additional profits, by identifying them on mortgage statements only as 'other charges,' 'other fees,' 'miscellaneous fees,' or 'corporate advances.'"
The class seeks declaratory and injunctive relief, restitution and disgorgement, and compensatory and treble damages for unfair competition, unjust enrichment and RICO conspiracy.
Wells Fargo Bank JP Morgan Chase Federal RICO Lawsuit Legal Help
If you or a loved one has suffered damages in this case, please click the link below and your complaint will be sent to a lawyer who may evaluate your claim at no cost or obligation.Published on Feb-27-12
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