CLASS ACTION AGAINST AMERICA'S SERVICING COMPANY SHOULD CLAIM DAMAGES FOR STRESS INDUCED ILLNESS, ATTEMPTED AND SUCCESSFUL SUICIDE, IRREPARABLE HARM TO FAMILIES NATIONWIDE. I DON'T KNOW HOW A COMPANY PAYS FOR THAT. ASC IS A PERFECT EXAMPLE WHY THERE SHOULD BE NO LIMIT ON THE DOLLAR AMOUNT THAT CAN BE AWARDED IN A CLASS ACTION LAWSUIT.

Suit alleges America's Servicing Company 
induced distressed borrowers into default
by JON PRIOR

Tuesday, November 30th, 2010, 9:38 am

New York law firm Harwood Feffer filed a class action lawsuit against a Wells Fargo (WFC: 30.99 -1.02%) servicer America's Servicing Company alleging it induced distressed borrowers to default on their mortgage in order to get a modification, meanwhile accruing late fees and penalties.

According to the suit, ASC allegedly told the borrowers now represented by Harwood Feffer that they would not be able to modify the mortgage as long as they were current. The firm said by making a loan default a pre-requisite for modification — even if the borrower qualified because of financial hardship — credit scores were harmed and fees, penalties and additional interest were charged.

The firm is suing ASC for compensation on those fees, totaling more than $5 million for the 12 plaintiff households. The suit was filed in U.S. District Court for the Northern District of California.

According to the Treasury Department's Home Affordable Modification Program guidelines, a participating servicer can offer a modification to a borrower facing imminent default. Wells Fargo participates in the voluntary program, but ASC does not.

Mortgage servicers have come under fire from Congress, regulators, state attorneys general and the public for mishandling foreclosure affidavits. Class action attorneys have used the issue to raise questions over the entire mortgage documentation process, from foreclosures and securitization to now modifications.

Wells Fargo and ASC did not immediately reply to requests for comment.

Related articles

• Brown Reaches Settlement With Wells Fargo Worth More Than $2 Billion to Californians With Risky Adjustable-Rate Mortgages (yubanet.com)
• Why Making Trial Mortgage Modifications Permanent Is So Difficult (dailyfinance.com)
• Wells Fargo Making Mortgage Changes (online.wsj.com)
• Wells Fargo to modify 15,000 mortgages (money.cnn.com)
• Distressed Homeowners Appeal to Third Circuit in Foreclosure Fraud Class Action Against Countrywide, Wells Fargo and Phelan Hallinan & Schmieg (prweb.com)