NJ announces settlement with Wells Fargo over deceptive marketing of adjustable rate mortgages
By APWednesday, October 6, 2010
Wells Fargo agrees to modify some NJ loans
TRENTON, N.J. — Wells Fargo has agreed to provide New Jersey homebuyers with nearly $67 million in loan modifications to settle charges of deceptive marketing of adjustable-rate mortgages.
Under terms of the settlement announced Wednesday by state Attorney General Paula Dow, Wells Fargo Home Mortgage also will pay the state nearly $4 million.
The allegations involve three companies acquired by Wells Fargo in 2008: Wachovia Corp., Golden West and World Savings.
Officials say the companies failed to warn borrowers that choosing the minimum payment option on their “Pick-a-Payment” mortgages could fail to cover the interest, leading to increasing debt.
San Francisco-based Wells Fargo projects it will modify loans for at least 900 homebuyers.
(This version corrects the date Wells Fargo acquired the companies to 2008.)
