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Wells Fargo to pay $81.6 million in bankruptcy settlement

Staff writer |
Wells Fargo & Co., has agreed to pay $81.6 million to settle claims it failed to notify thousands of bankrupt homeowners that it was increasing their mortgage payments in violation of federal bankruptcy law.

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The U.S. Trustee Program, the arm of the Justice Department that oversees the nation’s bankruptcy courts, said that the San Francisco bank has agreed to pay homeowners for repeatedly violating a 2011 bankruptcy law requiring them to notify the homeowners of any changes in their mortgage payments.

The law at issue requires mortgage lenders to give people who have filed for protection under chapter 13 of the bankruptcy code 21 days’ notice before raising their mortgage payments.

Under chapter 13, a person can keep big assets such as a home or car while repaying their debts over a three- to five-year period.

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