Real Estate & Property Law
Wells Fargo Used Dubious Appraisals to Cut Home Equity Lines, Suit Says
Posted Aug 19, 2009 1:31 PM CDT
By Martha Neil
A new lawsuit has been filed against Wells Fargo & Co. over its home equity line practices, adding to a growing list of litigation against the mortgage lender for which class action status is being sought.
Homeowner Michael Hickman contends that Wells Fargo is using inaccurate computerized appraisals to obtain artificially low property valuations that justify reducing the equity lines of credit that many rely on for relatively low-cost financing, reports the Associated Press. Meanwhile, Wells Fargo has benefited from a $25 billion taxpayer-funded federal bailout that was supposed to help improve access to credit for consumers says attorney Jay Edelson, who filed the suit in Illinois.
In recent weeks, Wells Fargo was sued in federal court in Massachusetts, over "payment option" loans that allegedly were destined to fail and, as the Los Angeles Times reported, by the Illinois attorney general over subprime lending that allegedly discriminated against minorities.
Wells Fargo did not immediately comment on the new lawsuit. The company has denied the allegations in the other two cases.