Wells Fargo Bank has agreed to pay $81.6 million to settle claims that it failed to notify homeowners in bankruptcy of changes in their mortgage payments.
The Department of Justice said Thursday that the lender’s failure to give borrowers timely notice of payment hikes or reductions violated a federal bankruptcy rule aimed at ensuring proper accounting of consumers’ costs in bankruptcy.
Under the rule, which took effect in December 2011, mortgage lenders are required to give borrowers in Chapter 13 bankruptcy 21 days’ notice before making an adjustment to their monthly payment.
Wells Fargo acknowledged the violations, which involved nearly 68,000 accounts of homeowners in bankruptcy between Dec. 1, 2011, and March 31 of this year. The biggest portion of the settlement payout, $53.6 million, will be paid to more than 42,000 homeowners whose mortgage payments went up without receiving a timely notice from Wells Fargo.
