Class Action Horror For Wells Fargo Pick-A-Payment Borrowers As $50M Settlement With Bankster Yields $96 Per Victim, $25M For Attorneys

The Reno Gazette Journal reports:

• Ninety-six dollars. That's the compensation borrowers nationwide are set to receive for giving up their right to sue a leading lender for a controversial mortgage program critics call "deceptive" and "toxic."
• The amount comes from a class-action lawsuit settlement that was granted final approval by a California district court in May. The lawsuit targeted a loan product known as "Pick-a-Payment," an adjustable rate mortgage (ARM) that allowed borrowers to make minimum payments for a limited time.

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• A closer look at the terms of the settlement, however, raises questions about just how fair the deal is for borrowers. High on the list is the amount of the financial compensation borrowers are set to receive.
• "Wells Fargo is taking Pick-a-Payment customers buried in toxic mortgages and giving them less than $100," said Wayne Moon, a spokesperson for The Public Interest Law Firm (TPI), a Reno 501 (c)(3) nonprofit that also operates in Utah and California. "And they're getting away with it."

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• The firm [TPI] believes that [class action lead counsel] Arbogast & Berns and Wells Fargo purposefully withheld key information from class members to prevent any objections to the settlement prior to final approval. The firm also accused Wells Fargo of purposefully approving a large number of less favorable modifications while knowing full well that a settlement was in the works.
• "Wells Fargo wants this thing to go through because they're getting away with a $50 million settlement for all the garbage they've done," Moon said. "Meanwhile, people are getting less than 100 freaking dollars while lead counsel is getting $25 million. It certainly shows you which parties stood to benefit from this settlement. It's certainly not the class members."

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• Now TPI is working to file an appeal against the class action settlement at the U.S. District Court for the Northern District of California, San Jose Division. The firm also filed a separate objection against the settlement.

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• "It's bad enough that homeowners can't get help when they need it," Moon said. "Now you have this crappy settlement that sets a precedent. Banks nationwide are watching to see if they can do this. They know they can mitigate their losses through civil litigation. It's criminal what they're doing and they're getting away with it. And our courts and complicit government is allowing them do so."

For more, see RGJ Investigates: Fraud case could give borrowers only $96.