2012-12-12 — mortgagedaily.com
``Accusing Wells Fargo & Co. of reneging on a sweeping mortgage-modification deal, a lawyer for troubled homeowners is trying to reopen a lawsuit involving risky "pick-a-pay" loans written during the housing bubble.
Legal filings last week said Wells had failed to provide wide-ranging reductions of loan balances to delinquent borrowers, as it had promised two years ago, when it settled a combined national class-action suit. A bank spokeswoman disputed the filing, calling it riddled with errors.
The settlement was reached in December 2010 before U.S. District Judge Jeremy Fogel in San Jose. At the time, the San Francisco bank said it would provide at least $50 million and as much as $600 million in modification benefits to troubled borrowers with the pay-option loans.
Plaintiffs' attorney Jeffrey K. Berns of Woodland Hills had calculated the number might reach $2 billion.
Of the 66,000 requests for loan modifications made in the 18 months ending Sept. 30, Wells granted only 1,746, or 2.6 percent, Berns alleged.
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