Wells Fargo sued over home equity lines of credit

[forum_admin]

A lawsuit has been filed against Wells Fargo seeking class action status to represent all borrowers whose home equity line of credit was unfairly cut based on faulty computer models that artificially deflated home values.

The suit, filed in Illinois, claims Wells Fargo failed to accurately assess the value of customers' houses before deciding to cut the size of their credit lines. San Francisco-based Wells Fargo, which bought Charlotte's Wachovia Corp. last year, is accused of using unreliable computer models that valued home prices too low to justify cutting the size of customers' loans.

The Wells Fargo home equity lawsuit was filed by Michael Hickman, an Illinois homeowner, who claims that the line of credit on his property was reduced based on unreliable computer models the bank used to calculate property values following the recent decline in the housing market.

The lawsuit contends that the mass reductions in credit limits are "unconscionable" because Wells Fargo received $25 billion in taxpayer bailout funds last fall "to ensure the continued flow of credit to customers."

Home equity lines of credit are similar to credit cards in that a customer has a credit limit and can continue to borrow money until the limit is reached. Once a portion is paid off, it again becomes accessible to borrow. But, home equity lines of credit are backed by a borrower’s property, whereas credit cares are unsecured.

[forum_admin]

Michael Hickman, who filed the lawsuit on behalf of himself and is seeking class action status for it, claims Wells Fargo also did not provide proper notice that the bank was reducing the size of the credit lines.

Hickman is being represented by KamberEdelson LLC, a Chicago-based law firm, which is also representing clients that have filed similar suits against JPMorgan Chase & Co. and Citigroup Inc.



KamberEdelson LLC

About the Firm

KamberEdelson, LLC handles complex litigation and transactional work and performs legal and political consulting on behalf of consumers, technology companies, and traditional brick and mortar businesses. With attorneys strategically located in Chicago, New York, Los Angeles, and Central Florida, our practice is national in scope.

Contact

350 North LaSalle Street
Suite 1300

Chicago, IL 60654
Phone: (312) 589-6370
Fax: (312) 589-6378

KamberEdelson LLC: Website