Wells Fargo & Co. said Wednesday it is refunding certain customers who may have wrongfully paid fees for mortgage lock extensions. The bank gave additional details on its plans after Chief Executive Timothy Sloan mentioned the refunds during a congressional hearing Tuesday.
The San Francisco-based bank said it would reach out to all home lending customers who paid fees for so-called mortgage rate lock extensions from September 16, 2013 through February 28, 2017, around 110,000 customers, and refund those who believe they shouldn't have paid those fees.
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Wells Fargo said it expects the first refunds will go out by the end of the year. Customers in the time frame the bank examined paid a total of $98 million in fees, and the bank said it expects refunds to be lower than that total since "a substantial number of those fees were appropriately charged."
Over the summer the bank disclosed in a quarterly securities filing that it was reviewing policies and procedures around mortgage rate lock extension fees following media reports on the matter. It also disclosed that the Consumer Financial Protection Bureau was investigating the situation.
Wells Fargo said in Wednesday's press release the decision to issue refunds followed an internal review that found its policy implemented in September 2013 wasn't consistent and sometimes customers were charged fees when the bank was responsible for delays that necessitated the extensions. The bank changed its policy in March 2017.
Before September 2013 the bank didn't have a written policy regarding those fees and it usually voluntarily elected to cover most of the costs for reasons including internal production delays, a person familiar with the matter said.
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(END) Dow Jones Newswires
October 04, 2017 10:39 ET (14:39 GMT)