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Wells Fargo Sued For Reducing HELOC

[Aug 26, 2009.]

 

Are current regulations making it too easy for a bank to take away your home equity line?  Consider a business owner who may need to buy equipment to diversify in this changing economy.  What if his source of funds was a home equity loan that was taken away without notice?  Maybe the business owner would go bankrupt and become unemployed. 

The question on many peoples' minds is, "weren't these banks given billions of tax payer dollars to help keep credit flowing?"  Of course the banks must also limit their exposure to bad mortgages.  But taking away a homeowner's home equity line while they are in the middle of a remodel, leaving them with a half torn up house, doesn't do much to help the banks collateral.

Maybe the lawsuit will help answer the questions on peoples' minds and help bring new regulations to protect the consumer.

Four Facts About The Case


  • August 19, 2009 law firm KamberEdelson LLC based in Chicago, IL filed a lawsuit against Wells Fargo Bank on behalf of homeowner Michael Hickman. 

  • In May 2006 Wells Fargo gave Hickman a $75,000 home equity line of credit.  In October 2008 Wells Fargo reduced Hickman's HELOC to $31.039.83. Hickman claims that he received no advance notice of the action.

  • Hickman's suit, which is seeking class action status, claims that Wells Fargo broke a Federal prohibition on reducing a homeowner's equity line without a fair appraisal and without cause such as late payment.

  • Wells Fargo is currently reviewing the lawsuit and has issued a statement.  Wells Fargo is confident in their position and practices.  The bank feels its methods are supported by regulatory guidelines.


Sources: RGJ.com, Bizjournals.com

Click here to read the actual complaint that was filed with the court.

 

Three Things Hickman's Lawyers Want You To Know

  • As soon as the lawsuit was filed the firm received 400 phone calls and emails from people all across the country. People were eager to share their own story about Wells Fargo reducing their home equity lines.

  • Some of the people who called in were single mothers, school teachers, business owners, and military personnel.

  • The lead attorney, Jay Edelson, has a reputation as a bull dog and a winner.  His most recent victory was a $30 million dollar lead paint suit against Thomas the Tank Engine & Friends Wooden Railway toys for children.  He was also lead counsel for the $24 million settlement of the 2008 pet food recalls.


Source: StockNod.com

 

About Author:

Renee Morgan has been a loan officer for over eighteen years. She is also a freelance writer and guest expert for radio and TV.

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