Wells Fargo pays $108 million to settle whistleblower suit on over-charging vets

Wells Fargo & Co will pay the U.S. government $108 million to end a whistleblower suit which said the bank charged military veterans hidden fees to refinance their mortgages, and concealed the fees when applying for federal loan guarantees. The whistleblower suit,filed in 2006 and made public in 2011, by  mortgage brokers Victor Bibby and Brian Donnelly. They  sought to recoup losses that the governmentsuffered on guaranteed loans that went into default..Bibby and Donnelly had sued eight lenders to recoup similar losses, and Wells Fargo’s settlement is the seventh and largest.

 Bank of America Corp, Citigroup Inc, First Tennessee, JPMorgan Chase & Co, PNC Financial Services Group Inc and SunTrust Banks Inc settled in 2012 for a combined $161.7 million.Wells Fargo has in the last 11 months been addressing fallout from other practices, including a scandal over its creation of unauthorized customer accounts, and its charging of borrowers for car insurance they did not want or need. The bank said it is examining whether it may have imposed unnecessary financial harm on customers through residential mortgage fees, frozen deposit accounts, and “add-on” products such as identity theft protection. In 2011, Wells Fargo had reached a $10 million settlement in a separate class action lawsuit claiming it imposed excessive closing costs on about 60,000 refinancing loans for veterans.
Jeffrey Newman represents whistleblowers but not those in this case.