The Wells Fargo Home Loan Modification Settlement Explained
The Hernandez, et al., v. Wells Fargo Bank, N.A. Home Loan Modification Settlement is a class action settlement designed to compensate and resolve issues for borrowers who were harmed by an important breakdown in a fundamental element of Wells Fargo’s loan modification program. This page contains detailed information about the lawsuit, the settlement, and the implications for affected homeowners nationwide. Whether you’re a class member, an interested consumer, or just a curious party looking for information about the settlement of this high-profile lawsuit, we hope to answer your questions here.
The Lawsuit’s Background
During the period between 2010 and 2018, Wells Fargo Bank, N.A. (Wells Fargo) administered the U.S. Department of Treasury’s Home Affordable Modification Program (HAMP), an initiative designed to help financially troubled homeowners retain ownership of their homes by modifying the loan terms if they could not continue with their mortgage payments. With a calculation misstep relating to attorneys’ fees, Wells Fargo mistakenly calculated that some borrowers were ineligible for loan modifications and repayment plans. Thousands of eligible homeowners were thus wrongfully denied an opportunity to save their homes-and, in most instances, faced foreclosure.
Allegations against Wells Fargo
The plaintiffs in Hernandez, et. al v. Wells Fargo Bank, N.A., claimed the bank’s error not only violated program rules but also resulted in wrongful denials and financial loss and hardship to hundreds of families. The complaint further asserted that, as a result, Wells Fargo breached both contractual and statutory obligations and caused borrowers both economic damages and emotional pain and suffering. Notably, Wells Fargo ultimately admitted the mistake, issued letters notifying borrowers and made offers of its initial compensation. Nevertheless, the class sought broader relief and sanctions.
Who is affected by the Settlement?
The settlement applies to the following groups of borrowers:
- The Original Class
Homeowners who applied for a loan modification or repayment plan under the HAMP or similar government sponsored remedial efforts (e.g., Fannie Mae, Freddie Mac, FHA) during the relevant time period, were denied as a result of the Error, and thereafter foreclosure proceedings were initiated or foreclosure occurred. - The Supplemental Class
Borrowers identified after the initial class definition was set, but suffered similar harm.
Class members are spread across the country regardless of their state of residence. The settlement does not preclude affected individuals, whether they are currently located in their home state or not, from seeking any benefit from the settlement. For more details on eligibility, see the Eligibility Criteria page.
Benefits and Compensation
The settlement’s primary purpose is to provide compensation for those borrowers who were wrongfully denied mortgage assistance and, in many cases, lost their homes as a result. Several key components of the compensation process include:
- Most class members affected were automatically identified and received checks in the mail. A claim form was not needed unless a class member wanted to update their current address or location, or wanted to seek additional compensation beyond the automatic payment for emotional distress.
- Due to the human cost of wrongful foreclosure, the settlement included a special fund of $1.45 million exclusively for the benefit of borrowers who suffered severe emotional distress as a result of wrongful foreclosure.
- Claims submitted to this fund were first evaluated by a court-appointed special master-an attorney with experience evaluating claims of emotional distress.
- JND Legal Administration (JNDLA), a nationally known settlement administrator, will administer the claims process to ensure fairness and privacy and will communicate with all class members in a timely manner.
For more information about the claims process, visit the Claims Process page.
Deadlines, Eligibility and Your Rights
All deadlines for filing a claim, an exclusion or an objection have now passed. Any class member who has not yet received payment should contact the Settlement Administrator or check with the state’s unclaimed property division where you last resided. Automatic participation in the settlement applies to class members and there is no fee or charge to receive compensation. Settling individuals who believed they experienced extraordinary emotional distress were provided an opportunity to request additional compensation from the fund established for those purposes. The individual awards were determined by the court appointed special master. Importantly, this settlement does not limit your ability to pursue independent legal claims and remedies unrelated to the litigation. For more details on deadlines, see Important Deadlines.
Implications for Class Members
The settlement represents an important acknowledgment of the damage caused by WF’s mistake and a precedent for the way that financial companies should be required to correct systemic errors. To many borrowers, it offers partial compensation for financial losses and the emotional impact of foreclosure. Although no sum of money is sufficient to fully compensate someone who lost a home to foreclosure, this settlement attempts to provide justice and closure to affected borrowers. Further, the action reinforces the importance of transparency, checks and balances and accountability in the mortgage industry.
Role of JND Legal Administration
JND Legal Administration was appointed by the court to oversee all settlement administration. JND has significant experience in managing all facets of complex legal settlements, from ensuring that every class member receives accurate information, is given prompt help, and is treated fairly. From mailing compensation checks to administering the emotional distress fund to answering questions, JND’s goal is to make the process as easy and clear as possible for those who have been affected.
Frequently Asked Questions
- Q: How do I tell if I am a class member?
A: If you received a letter and/or compensation check from the Settlement Administrator, then you are in all likelihood a class member. If you believe that you are a class member but have yet to receive a payment, the first step is to contact the Settlement Administrator. - Q: I’ve moved. Do I need to tell you?
A: Yes. You should provide updated information to the Settlement Administrator to ensure that you receive any payments or other communications. - Q: Can I still submit a claim or object to the settlement?
A: All deadlines for claims, exclusions and objections have passed. If you have additional questions then you can reach out to the Settlement Administrator. - Q: What if I did not receive my settlement check?
A: Check with your state’s unclaimed property division to start and/or contact the Settlement Administrator.
For more answers, visit the Frequently Asked Questions page.
How to Ask a Question or Request More Information
If you have questions regarding the settlement, your eligibility, or if you would like to obtain support with updating your contact information, the Settlement Administrator, JND Legal Administration, is available to assist. They can be reached via telephone at 1-877-545-0236, email at [email protected], or by standard mail at Hernandez, et al. v. Wells Fargo Bank, N.A., c/o JND Legal Administration, P.O. Box 91350, Seattle, WA 98111. Please check this website often for the latest information and resources. You may also use the Contact Us page for further assistance.
Message to Borrowers
The Wells Fargo Home Loan Modification Settlement is a positive step toward correcting the effects of a massive error affecting thousands of homeowners. Money alone can never replace a lost home or the emotional toll that such a loss entails. However, recognition, accountability, and some degree of relief are welcome. If you or your family members were affected, know that it’s not too late: there is help, and your rights have not gone away. We urge all class members to stay informed, ask for help when you need it, and take action for yourself to ensure you receive the benefits due you.