One Louisiana judge is fed up with the way Wells Fargo handled one man’s mortgage and fined the bank $3.1 million, the largest single settlement for foreclosure misdeeds.
Federal Bankruptcy Judge Elizabeth Manger, who has been critical of the mishandling of home loans, issued an opinion last week which described Wells Fargo’s actions against one homeowner “highly reprehensible.”
Judge Manger ordered Wells Fargo to pay the homeowner, who has been tied up in bankruptcy court for over five years, $3.1 million in punitive damages.
The homeowner in this case is Michael Jones who was penalized with $24,000 in fines and fees. In 2007, Manger ruled that the bank improperly applied his loan payments to accrued interest and fees instead of his principle which was required by his service agreement. This triggered a windfall of additional fees and Jones was forced to declare bankruptcy.
In some instances a foreclosure attorney will recommend bankruptcy to keep a bank from seizing their homes.
While challenging Jones’ case, Wells Fargo filed numerous motions and legal documents, tying up the case for five years, which frustrated Judge Manger. Wells Fargo’s litigation practices would be too burdensome for most homeowners to challenge, even with the help of a foreclosure lawyer.
Even though banks have been ordered to change their foreclosure documents processing many homeowners are finding that there are still widespread abuses. They are able to contest an impending foreclosure when they hire an experienced foreclosure attorney.