Lawsuit filed in Baltimore County Circuit Court targets charge for

Daily Record, The (Baltimore), Sep 25, 2003 by Alisa Bralove

A Towson attorney filed a class action lawsuit yesterday against Wells Fargo Bank, the nation's top home mortgage lender, alleging that the company fraudulently overcharged its customers on home equity loans.

The suit, filed in Baltimore County Circuit Court, specifically claims that the lender collected recordation fees from its customers even though refinancing instruments are exempt from such fees.

Matthew H. Azrael, of Azrael, Gann & Franz, said he is unsure of how many Marylanders may be affected by the overcharges, but said a four-day study in Frederick found 97 similar transactions related to Wells Fargo customers.

"If the sampling in Frederick County is any indication, we believe it's a very large class of consumers that's affected by this," Azrael said. "Once the complaint is served, we'll serve [Wells Fargo] with discovery to get a handle on how many people we're talking about."

The class also has the potential to be large due to an increase in the number of people refinancing, with rates hitting a 40-year low this year.

According to Freddie Mac, refinancing accounted for 59 percent of mortgage originations last year, and is expected to continue on that upswing.

The named plaintiffs, Lawrence and Karen Adashek of Pikesville, refinanced their home equity loan with Wells Fargo in May.

Their settlement statement reflects a charge of $613 for "mortgage registration" but according to Azrael, the state's Tax-Property article exempts refinancing from that fee. Instead, he said, the Adasheks should only have paid $292.50 to record the deed.

The three-count complaint alleges negligence, breach of contract and violations of Maryland's Consumer Protection Act.

"The main goal of this suit is to educate the consumers as to what their rights are," Azrael said. "There are probably very few consumers out there that even know they've been overcharged."

Dennis Wyss, a spokesperson for Wells Fargo, declined to comment, citing the company's policy against discussing pending litigation.

According to the bank's Web site, it is the nation's top originator and number-two servicer of residential mortgages, with its funding accounting for the financing of one in every eight homes. In 2002, the lender had $333 billion in original loans and 4.4 million customers.

It is also the number one lender to ethnic minorities and low-to- moderate-income homebuyers, according to the site. The bank operates 19 financial stores in Maryland.