Tuesday, September 29, 2020
International

Wells Fargo accused of pausing mortgage payments

Wells Fargo

The forbearance provisions, included as part of the CARES Act, apply to federally backed mortgage loans

Wells Fargo customers are accusing the bank of pausing their mortgage payments without permission.

Tammi Wilson is one such customer who said her active accounts were deactivated and she couldn’t make payments on federally backed loans she says she had tried to pay down in April and May.

I click this button and next thing I know, I’m getting a thing that says I’m deferred and I can’t reverse something I didn’t even want, Wilson told NBC News. If you’re going to help people there is a super simple first step — just ask, ‘Do you need our help?’

She said the bank, without her knowledge, put her in forbearance, a program that suspended payments through a CARES Act program that aims to help borrowers with financial hardship during the coronavirus pandemic.

The forbearance provisions, included as part of the CARES Act, apply to federally backed mortgage loans, like those backed by Fannie Mae and Freddie Mac.

As of July 5, about 4.1 million loans were in forbearance, according to the Mortgage Bankers Association. The percent of loans in forbearance backed by Fannie Mae and Freddie Mac was about 6 percent, while those backed by Ginnie Mae was about 10.56 percent.

The relief provisions allow individuals to request forbearance for 180 days with the option of extending the pause for an additional 180 days.

People who took advantage of the forbearance option will be required to repay those amounts and they generally have a number of ways to do so depending on their loan.

The £1.73 trillion ($2.2 trillion) CARES Act passed by Congress in March provided coronavirus relief options to American workers and businesses.

Over the course of the pandemic, millions of Americans lost their jobs as a result of COVID-19 shutdowns across the nation. The speed and magnitude of job losses were unprecedented and were more than double what the U.S. saw during the global financial crisis in 2008.

Wells Fargo is one of the largest banks in America that handles home loans. Borrowers in at least 14 states claim they have been forced into forbearance plans by Wells Fargo.

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