Wells Fargo has agreed to pay about $16.2 million to customers to settle claims over a kickback scheme involving an Owings Mills title company, according to an agreement filed Thursday in U.S. District Court for Maryland.
It is the second settlement the bank has reached in connection with the scheme, in which mortgage brokers reportedly referred business to Genuine Title of Owings Mills in exchange for kickbacks and other materials.
The plot allegedly affected more than 9,000 customers, many of them in Maryland, according to Smith, Gildea & Schmidt LLC, which is representing the customers along with Joseph, Greenwald & Laake PA.
Wells Fargo agreed last year to pay $24 million in civil penalties and $10.8 million in redress to consumers under the terms of an agreement reached with the Consumer Financial Protection Bureau and Maryland Attorney General Brian Frosh. JP Morgan Chase also settled at that time.
This suit was brought privately on behalf of customers who were borrowers from 2009 through 2014. Similar cases against several other banks or mortgage companies, as well as against Genuine Title and three of its affiliates are still pending.
“It is gratifying to help those who were victimized unknowingly by Genuine Title. These types of backroom deals have no business in the real estate industry,” said Michael Paul Smith, a partner with Smith, Gildea & Schmidt.
A judge must approve the deal. A spokesman for Wells Fargo said the agreement “puts this entHousing Wireire matter behind us.” Employees involved have either left the firm or been fired, he said.
“We have taken appropriate corrective actions … and have in place procedures to provide strong oversight and monitoring of both the closing agent selection process and our team members’ roles in that process,” said spokesman Tom Goyda.
Source: The Baltimore Sun