Topics: California, Coronavirus, US News, Money
Homeowners in California could be in for a slice of a $56.85 million lawsuit settlement after Wells Fargo was sued for allegedly violating a federal act.
Cast your mind back to March 2020, when the world shut down over the Coronavirus pandemic, and millions of people watched their livelihoods collapse.
During that time, Americans could apply to have their mortgages or student loans paused, also known as forbearances.
As Practical Law explains, the CARES Act forbearance was a temporary, federally mandated pause or reduction in mortgage payments for borrowers with government-backed loans experiencing COVID-19-related financial hardship.
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It allowed up to 360 days of delayed payments without penalties, and did not require immediate repayment of the missed amount upon exiting.
Well, it turns out that a class action lawsuit has been brought against Wells Fargo for failing to report CARES Act forbearances accurately, breaking the Fair Credit Reporting Act.
Now, the company is in the middle of a legal battle, but has agreed to pay out a settlement while admitting no wrongdoing, Top Class Actions reports.
The settlement could be approved by the court, during its final hearing on April 17.
To be eligible for the settlement, you must have had a mortgage with Wells Fargo on a property located in California.
Your account must have been 'current' - not 'behind' - when you received a CARES Act forbearance, which must have begun on or after March 27, 2020.
Wells Fargo must have reported your account as 'in forbearance' or similar to credit bureaus instead of 'current.'
At this stage, it isn't clear exactly how much affected individuals will receive from the class action lawsuit.
The settlement still has to be approved in court in April, too.
However, the $56.85 million will be split among eligible class members, with the exact sum of money depending on how many people qualify and the cost of attorneys’ fees and administrative costs.
If you're eligible, you don't need to apply to receive a chunk of the settlement.
There is no form to fill out or admin to do, so be wary of any emails or texts that tell you otherwise.
As the CARES Litigation Act explains, 'even if you do nothing, you will be included in the Settlement, and you will receive an Automatic Payment from the Settlement Fund.'
Once a check has been sent out with your payment, it must be cashed within 90 days.
If you don't wish to be included in the settlement, then you must submit an objection by March 25.
This might be because you don't agree with the agreed-upon deal.
