A recent class action lawsuit filed on behalf of thousands of homeowners in New York against Wells Fargo alleges that while the bank received $25 billion in government bailout funds it failed to make a good faith effort to help borrowers avoid foreclosure in compliance with the federal government’s Home Affordable Modification Program (HAMP). The complaint, filed in the US District Court for the Eastern District of New York, accuses Wells of breach of contract, fraudulent inducement, unjust enrichment and violations of consumer protection laws. The lawsuit is one of several cases across the country alleging similar misconduct against banks.
HAMP was launched in 2009 as part of the federal government’s initiative to ease the foreclosure crisis. In exchange for receiving federal bailout funds, Wells Fargo was obligated to participate in HAMP, which precluded the initiation of foreclosure actions against struggling borrowers without first evaluating their eligibility for assistance. Continue Reading