Veteran Payday; Wells Fargo To Repay U.S.$108 Million Towards Veteran Loans.
Case Number: 06-00547 in Northern District of Georgia, U.S. District Court; U.S. ex rel. Bibby et al v Wells Fargo Bank NA et al.
A controversial whistleblower lawsuit has hit the U.S District Courts with a vengeance after successfully reaching a resolution settlement payout. Wells Fargo & Co (WFC.N) are now obligated to pay a substantial $108 million in damages over a veterans’ loan dispute. The whistleblower lawsuit advanced claims that Wells Fargo & Co deliberately charged excess hidden military veteran fees to refinance their own properties and that fees were concealed when the company applied for federal loan guarantees.
Ranking as the third largest bank in the U.S., Wells Fargo & Co made a statement on Friday the resolution puts to rest the allegations that the Interest Rate Reduction Refinance Loans were ineligible for guarantees provided by the U.S Department of Veterans Affairs loan guarantee program.
The alleged claims were filed in the District Courts in 2006 under seal and brought to the publics’ attention in 2011. Victor Bibby and Brian Donnelly, who operate as mortgage brokers in Georgia, served as whistleblowers also known as relators, and attempted to recover losses that both taxpayers and government suffered, as a result, on guaranteed loans that defaulted and the losses to government. Donnelly and Bibby sued eight separate lenders to recoup from extensive losses and Wells Fargo was the seventh lender and the largest.
First Tennessee, JP Morgan Chase & Co, PNC Financial Services Group INC, Sun Trust Banks INC, Bank of America Corp, and Citigroup INC settled the lawsuit in 2012 for a merged payout figure of $161.7 million according to the broker’s lawyer.
Wells Fargo issued a statement from their Chief Executive Tim Sloan specifying that they are committed to serving the financial health and well-being of veterans. Tim Sloan commented, “that being able to settle this longstanding lawsuit enables us to put this matter behind us and continue focusing on serving our customers and rebuilding trust with our stakeholders.”
In the previous eleven months, Wells Fargo has been required to address fallout concerns from other practices, including a scandalous sensitive matter of Wells Fargo creating unauthorised customer accounts, and charging additional fees for auto insurance that customers never consented to.
Wells Fargo stated on Friday that the company is scrutinizing whether they have delivered undue financial damage on customers through frozen deposit accounts, extra products such as identity theft protections, and residential mortgage fees.
The bank reached a substantial $10 million settlement in 2011 when a different class action lawsuit claimed that Wells Fargo had imposed excessive closing costs on almost 60,000 veteran refinancing loans.
Friday’s settlement is nothing less than impressive considering the government failed to assist Donelly and Bibby in pursuit of their lawsuit that falls under the federal False Claims Act (FCA).
Under this Act, private whistleblowers are eligible to sue on behalf of the government and share in recoveries if successful. Government intervention and assistance in lawsuits usually delivers a higher qui tam settlement, also known as a whistleblower award.