WELLS’ THIRD CLASS

Suit over home loans

Wells Fargo just got accused of finding yet another way to screw its customers.

A disgruntled homeowner filed a class-action lawsuit against the scandal-ridden bank this week, claiming it concocted reasons to delay his mortgage approval so it could milk him for additional fees.

Victor Muniz, a Nevada homeowner, alleged in San Francisco federal court that he fell victim to “a systematic effort at Wells Fargo” to charge home buyers and refinancers fees to extend lock-in periods on their mortgage rates.

The lawsuit — spurred by a whistleblower letter sent to Congress last fall — claims that “the need for that extension was caused by the bank, not the borrower.”

The Monday suit is at least the third customer issue at Wells that has spurred a classaction complaint in the past 30 days.

Since July 31, customers have filed suits seeking restitution after the bank allegedly duped 800,000 customers into buying $80 million in auto insurance they didn’t need. Earlier this month, small businesses claimed in a federal suit that the bank ripped them off with misleading credit card processing fees.

Muniz, who was looking to buy a home in Sandy Valley, Nev., in June, had locked in a 5.875 percent rate on a 30-year mortgage, according to court papers.

But Muniz was unable to close on the house because Wells had “communications issues” with an appraiser, whose opinion was needed be- fore the deal could close, the suit claims.

When the rate lock expired on Aug. 7, a Wells employee texted Muniz: “And just confirmed that the lender is paying for the lock extension so you guys are good on that,” according to a screenshot included in the suit.

But the next day, the bank charged Muniz $287.50 for the rate-lock extension — and hasn’t paid him back, the suit claims.

In a letter to committees in both houses of Congress last fall, whistleblower Frank Chavez, a former loan officer at Wells, first brought the rate lock extension controversy to the public eye.

“I believe the damage done to Wells Fargo mortgage customers in this case is much, much more egregious” than the fake-accounts scandal that cost former CEO John Stumpf his job last fall, Chavez wrote.

“We are talking about millions of dollars, in just the Los Angeles area alone.”

While the whistleblower letter was sent in November and published two months later, the suit alleges that the practice has continued up through this month, at least.

Tom Goyda, a spokesman for the bank, said Wells Fargo couldn’t comment specifically on the suit.

“Our current processes are designed to ensure that our rate-lock extension fee policy is interpreted and applied consistently,” he said. “We continue to work through a comprehensive review of our past practices regarding rate-lock extensions that will help us evaluate the facts.”