April 13, 2018 | USA Today Wells Fargo outlined plans Wednesday to refund customers who were charged extra fees to extend rate locks on mortgages because of delays that were caused by the bank, not the customers.
The San Francisco-based bank, which is still working to repair its reputation following last year's fake account scandal, said it will refund customers who paid fees to extend interest rate locks between Sept. 16, 2013, through Feb. 28, 2017 but "who believe they shouldn't have paid those fees."
In a rate lock, the lender guarantees that it will provide the borrower with a mortgage at a specific rate, say 4%, for a specific time period, such as 60 days. There is often a charge to extend the rate-lock period.
In the Wells Fargo case, borrowers were hit with additional fees for allegedly getting their loan paperwork in late. But the bank, after a review of its rate-lock fee policies, acknowledged that the delays in some cases were caused on its end.
In a statement, the bank said its rate-lock extension policy put in place in September 2013 was "at times, not consistently applied, resulting in some borrowers being charged fees in cases where the company was primarily responsible for the delays that made the extensions necessary."
Effective March 1, 2017, Wells Fargo changed how the company manages the mortgage rate-lock extension process.
The company said it would reach out to customers and start issuing refunds in the final months of this year.
While roughly $98 million in rate-lock fees were assessed to about 110,000 loan applicants in the nearly two-and-a-half-year period in question, the company believes a "substantial number" of those fees were "appropriately charged."
As a result, Wells Fargo said "the amount ultimately refunded likely will be lower, as not all of the fees assessed were actually paid and some fees already have been refunded."
The move was the latest attempt by the bank to rebuild trust with customers, its CEO Tim Sloan said in a statement.
"We want to serve our customers as they would expect to be served, and are initiating these refunds as part of our ongoing efforts to rebuild trust," Sloan said.