A Wells Fargo borrower is seeking restitution from the alleged billions of dollars he claims the megabank made off of customers' rate lock fees in a prior scandal. Counsel for Wells last week filed a motion to dismiss the lawsuit for numerous reasons including a lack of specificity.
Anthony Morris, a New York resident and past Wells home loan client, sued the lender earlier this year, and Wells elevated the suit to a federal court in June. The unjust enrichment complaint stems from refunds the bank issued over rate lock extension fees in the past decade it admitted were wrongfully administered.
The company enjoyed a massive return of investment on the RLEFs which during the case "will be determined to be in the billions of dollars," counsel for Morris wrote in the initial complaint.
"Wells' minimal payments to borrowers, including Morris, are wholly inadequate, inequitable, and in reality do nothing but try to cover up the enormous profits that Wells obtained from its nearly two-decades-long practice of wrongfully charging, withholding and reinvesting the RLEFs at issue," wrote Morris' attorneys.
Wells' legal representation said that in addition to the suit's lack of specificity, Morris received a refund with interest and additional compensation totaling $7,525.02.
"The conversion claim must be dismissed because Plaintiff does not seek a definite sum and because Plaintiff had no ownership of or right to the 'profits' he seeks," wrote Amanda Groves, an attorney at Winston & Strawn LLP, on behalf of the firm.
Morris' attorney didn't respond to a request for comment this week, while a spokesperson for the bank referred to Wells' motion to dismiss. The sides are scheduled to argue the motion in October in the U.S. District Court, California Northern District in Oakland.
The lawsuit doesn't identify specific damages and is likely far from receiving a consideration for class action status. Other federal suits against Wells, including discriminatory lending complaints, remain pending. The company also earned a minor victory in May as a federal court dismissed some claims in a forbearance suit.
The depository charged $98 million in RLEFs to around 110,000 borrowers between 2013 and 2017, the period in which Wells said its fee policies weren't consistently applied. It also said at the time some of those RLEFs were appropriately charged, while others were never paid or already refunded.
Morris said he received a $4,808.113 refund for his mortgage closed in 2005, while Wells' complaint also cited an additional $1,410.21 interest payment and $1,307.68 compensation for the time he didn't have the funds.
Morris only learned of the refund when he received it in 2021, the lawsuit said, despite him never requesting restitution. Counsel for Wells, emphasizing the 18-year gap between his home loan and rate lock refund, asked the court to reject his claim for failing to meet delayed discovery and/or fraudulent concealment legal doctrines.
The $1.9 trillion-asset bank announced at the beginning of the year it would exit the correspondent channel, and recently addressed concerns around its commercial real estate portfolio in its latest earnings report.
