In re Wells Fargo Mortgage Modification Litigation

Background

The court considered two motions. Wells Fargo Bank, N.A. moved to consolidate this case with Prado v. Wells Fargo & Co., No. 24-cv-05105, which the opinion calls the “Prado Action.” Barbara Prado moved to intervene and asked the court to sever the claims of seven plaintiffs in this case who received loan modifications, then consolidate those claims with the Prado Action.

The consolidated class complaint in this case asserted claims for thirteen individuals and a proposed class. The plaintiffs alleged that errors in Wells Fargo’s automated decision-making software affected eligibility for government-mandated and other mortgage modifications. They alleged that six named plaintiffs lost their homes and that seven others received modifications but had to pay higher mortgage payments than they otherwise would have paid.

Prado’s complaint alleged that Wells Fargo made errors while modifying mortgage loans, causing borrowers to be overcharged on their mortgage accounts.

The parties’ positions

Wells Fargo argued that the two actions shared questions about whether it made errors in mortgage modifications, whether those errors were unlawful, and whether borrowers were injured. The plaintiffs in this case supported consolidation.

Prado argued that the claims of the seven plaintiffs who received modifications should be separated from this case and consolidated with the Prado Action. Alternatively, she argued that a consolidated case should have two separate proposed classes: one for people who did not receive a modification and another for people who did.

Court’s analysis

The court found that the two actions shared common questions of law and fact and that consolidation was appropriate. It rejected Prado’s argument that people who did not receive modifications and people who did receive them had a conflict that would prevent class certification. The court found no showing that the two groups had taken, or were likely to take, antagonistic positions on a fundamental issue.

The court also rejected the argument that the named plaintiffs were inadequate representatives because some allegedly lost homes while others were allegedly overcharged. It stated that the plaintiffs might still be able to show that they were adequate class representatives, even if the groups later developed differing interests.

Rulings

Judge Maxine M. Chesney granted Wells Fargo’s motion to consolidate the two actions. The court denied Prado’s motion to intervene.

The court also denied Prado’s request to have her counsel appointed as a third interim class counsel and denied Wells Fargo’s request to reduce the number of interim class counsel to one attorney or firm. The court stated that neither party had shown good cause to expand or reduce the number of interim class counsel.

The court vacated the hearing scheduled for December 13, 2024. The opinion does not decide the underlying mortgage-modification claims or whether Wells Fargo violated the law.