Wells Fargo Inspection Fee Settlement

Frequently Asked Questions

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1. What is this Lawsuit About?

A. The Allegations

Plaintiffs allege that, in servicing mortgage loans, Wells Fargo violated California’s Unfair Competition Law, Cal. Bus. & Prof. Code §17200 et seq. (the “UCL”), and the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. §1961 et seq. (“RICO”) in connection with its assessment and charging of property inspection fees. Specifically, Plaintiffs alleged that Wells Fargo ordered a property inspection whenever a borrower fell behind on mortgage payments by forty-five days or more, and then ordered subsequent inspections every twenty-five to thirty-five days for as long as the borrower remained delinquent. Plaintiffs claim that these property inspections ordered by Wells Fargo were unnecessary and that their cost should not have been assessed to borrowers. Plaintiffs also alleged that the true nature of these charges was concealed from borrowers by labeling them as “Other Charges.”

Wells Fargo contends that all of its property inspection policies and procedures complied with the law and that property inspections and related charges to borrowers were reasonable and necessary. Defendants deny that they did anything wrong and maintain that their conduct was at all times in compliance with applicable law.

The Court has not ruled in favor of Plaintiffs or Defendants. This Website is not intended to be an expression of any opinion by the Court with respect to the truth of the allegations in this lawsuit or the merits of the claims or defenses asserted. This Website is solely to advise you of the pendency of the Action and the proposed Settlement and your rights in connection with that Settlement.

B. Status of the Case

Plaintiffs Edward R. Huyer, Jr. and Connie Huyer commenced this action by filing a putative class action complaint in the United States District Court for the Northern District of California on August 5, 2008 alleging claims against Defendants for violation of RICO, the UCL and the California Consumers Legal Remedies Act, as well as for fraud, deceit and misrepresentation and unjust enrichment. After Plaintiffs filed their initial complaint, Defendants moved to transfer the action to the Southern District of Iowa, which motion was granted on December 17, 2008.

On September 2, 2015, the Court preliminarily approved the Settlement, preliminarily certified the Settlement Class for settlement purposes only, authorized Notice to be sent to potential members of the Settlement Class, and scheduled the Settlement Fairness Hearing to consider, among other things, whether to grant final approval of the Settlement.

Defendants have denied, and continue to deny, that they did anything wrong.

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2. What is a Class Action and Who is Involved?

In a class action, one or more persons called class representatives sue on behalf of other persons with similar claims. In this case, the class representatives are Plaintiffs Edward R. Huyer, Jr., Connie Huyer, Carlos Castro, and Hazel Navas-Castro.

The class representatives and the persons on whose behalf they have sued together constitute the “Class” or “Class Members.” Their attorneys are called “Plaintiffs’ Counsel” or “Class Counsel.” The persons that have been sued are called the Defendants.

In a class action lawsuit, one court resolves the issues for everyone in the class, except for those class members who exclude themselves from the class. The Court, by order dated September 2, 2015, certified a Settlement Class in this case.

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3. How Do I Know if I am a Class Member?

If you have or had a mortgage serviced by Wells Fargo and owe or paid a property inspection fee assessed during the period August 1, 2004 through December 31, 2013 (the “Class Period”), you are a Class Member . As set forth in the Stipulation, excluded from the Class are Defendants, any entity in which a Defendant has a controlling interest or is a parent or subsidiary of, or any entity that is controlled by a Defendant, and any of Defendants’ officers, directors, employees, affiliates, legal representatives, heirs, predecessors, successors, and assigns. Also excluded from the Class are those Persons who timely and validly request exclusion from the Class pursuant to the Notice.

If you are still unsure whether you are included, you can ask for free help. You can call (855) 382‑6434 for more information.

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4. What Are the Reasons for Settlement?

The Court has not reached any final decisions in connection with Plaintiffs’ claims against Defendants. Instead, Plaintiffs and Defendants have agreed to this Settlement. In reaching the Settlement, they have avoided the cost, delay and uncertainty of further litigation.

As in any litigation, Plaintiffs and the proposed Class would face an uncertain outcome if they did not agree to the proposed Settlement. The Parties expected that the case could continue for a lengthy period of time and that if Plaintiffs succeeded, Defendants would file appeals that would postpone final resolution of the case. Continuation of the case against Defendants could result in a judgment greater than this Settlement. Conversely, continuing the case could result in no recovery at all or a recovery that is less than the amount of the Settlement.

Plaintiffs and Plaintiffs’ Counsel believe that this Settlement is fair and reasonable to the members of the Class. They have reached this conclusion for several reasons. If the Settlement is approved, the Class will receive a significant monetary recovery. Additionally, Plaintiffs’ Counsel believes that the significant and immediate benefits of the proposed Settlement are an excellent result for the Class – especially given the risks and uncertainties of continued litigation.

Defendants deny any wrongdoing and their agreement to settle this Action shall in no event be construed or deemed to be evidence or an admission or concession on the part of any Defendant with respect to any claim or of any fault, liability, wrongdoing, or damage.

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5. What is the Monetary Value of the Proposed Settlement?

The Settlement, if approved, will result in the payment of $25,750,000 (the “Settlement Fund”), consisting of a cash settlement fund in the amount of $22,500,000, and the payment of $3,250,000 towards the cost of providing Notice and administrating the Settlement. If the cost of giving notice and administering the Settlement is less than $3,250,000, any remaining money will be available for distribution to Class Members in accordance with the Plan of Allocation described below. Conversely, if the cost of notice and administration exceeds $3,250,000, any additional amount shall be paid from the Settlement Fund.

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6. How Much Will My Payment Be?

The Settlement Fund, plus interest earned from the date it is established, less costs, fees and expenses (the “Net Settlement Fund”), will be divided among all eligible Class Members whose claim for recovery has been allowed pursuant to the terms of the Stipulation. Costs, fees, and expenses include Court-approved attorneys’ fees and expenses, the costs of notifying Class Members, including the costs of printing and mailing Postcard Notice and the cost of publishing newspaper notice, and the costs of claims administration. The Net Settlement Fund will be distributed to Authorized Claimants pursuant to the Plan of Allocation that is described below.

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7. What is the Proposed Plan of Allocation?

The objective of the Plan of Allocation is to equitably distribute the settlement proceeds to those Class Members who have suffered an economic loss as a proximate result of the alleged wrongdoing. The Plan of Allocation generally estimates the amount of loss that a Class Member could claim for purposes of making pro-rata distributions from the Net Settlement Fund (“Recognized Claims”). As described herein, each Class Member’s pro-rata share of the Net Settlement Fund shall be determined based upon each Class Member’s “Recognized Claim.” The Plan of Allocation is not a formal damages analysis. Rather, it represents Plaintiffs’ Counsel’s considered and informed good faith effort to allocate the Net Settlement Fund in an equitable and efficient manner. The Recognized Claims determined under the Plan of Allocation are not intended to estimate, nor be indicative of, the amount that a Class Member might have been able to recover after trial. Nor are the Recognized Claims determined under the Plan of Allocation intended to be estimates of the amount that will be paid to a Class Member pursuant to the Settlement. The computations under the Plan of Allocation are only a method to weigh the claims of Class Members against one another for the purposes of making pro-rata distributions from the Net Settlement Fund. The Recognized Claim formula is the basis upon which the Net Settlement Fund will be proportionately allocated to Class Members.

During the litigation, Wells Fargo produced to Plaintiffs loan level data reflecting assessments, waivers, and certain payments and credits of property inspection fees and other charges with respect to more than 2.7 million loans belonging to Class Members. These loans were categorized as (A) Active – i.e., loans with an unpaid principal balance greater than zero; (B) Paid-In-Full – i.e., loans that were paid-in-full by the borrower; or (C) Post-Sale – i.e., loans with respect to which there had been a foreclosure sale, short sale, deed-in-lieu, or charge-off. In addition, property inspection fees were coded by Wells Fargo as either (A) “Fee Code 4,” which generally corresponds to inspection fees charged to loans in delinquency status; or (B) “corporate advance,” which generally corresponds to inspection fees charged to loans that were in foreclosure status.

The formula for calculating a Class Member’s Recognized Claim for loans in each of these categories is as follows:

  1. For Active Loans, the Recognized Claim is the sum of (i) all subsequent1 Fee Code 4 inspection fees assessed, plus (ii) 50% of all subsequent corporate advance inspection fees assessed, plus (iii) 10% of all initial Fee Code 4 and initial corporate advance inspection fees assessed, less any credits or waivers of such fees, to the extent such assessments, credits or waivers may be determined from the loan level data produced by Wells Fargo.2
  2. For Paid-In-Full Loans, the Recognized Claim is the sum of (i) all subsequent Fee Code 4 inspection fees paid, plus (ii) 50% of all subsequent corporate advance inspection fees paid, plus (iii) 10% of all initial Fee Code 4 inspection fees paid and initial corporate advance inspection fees paid, less any credits or waivers of such fees, to the extent such payments, credits or waivers may be determined from the loan level data produced by Wells Fargo.
  3. For Post-Sale Loans, the Recognized Claim will be based on submission of an approved claim form and will be the sum of (i) all subsequent Fee Code 4 inspection fees paid, plus (ii) 50% of all subsequent corporate advance inspection fees paid, plus (iii) 10% of all initial Fee Code 4 and initial corporate advance inspection fees paid.

Each Class Member shall be allocated a pro-rata share of the Net Settlement Fund based on his or her Recognized Claim compared to the Total Recognized Claims of all Class Members. The pro-rata shares shall be determined by multiplying each Class Member’s “Recognized Claim” by a fraction, the numerator of which shall be the amount of the Net Settlement Fund and the denominator of which shall be the Total Recognized Claims of all Class Members.

Distributions will be made to Class Members after all claims have been processed and after the Court has finally approved the Settlement. Checks issued to Class Members will remain valid for a period of ninety (90) days after issuance but will be canceled as stale after such period. If there is any balance remaining in the Net Settlement Fund, by reason of un-cashed checks or otherwise, six months after the initial distribution, such funds shall be re-distributed to eligible Class Members who have cashed their initial distributions and who would receive, based on their Recognized Claim, a pro-rata share of at least $25.00 from such re-distribution, after payment of any unpaid costs or fees incurred in administering the Net Settlement Fund for such re-distribution. If, six (6) months after such redistribution, any funds remain in the Net Settlement Fund, then such balance shall be contributed to the United Way, with the funds earmarked for financial education classes.

Plaintiffs, Defendants, their respective counsel, and all other Released Parties shall have no responsibility or liability whatsoever for the investment or distribution of the Settlement Fund, the Net Settlement Fund or any portion thereof, the Plan of Allocation or the determination, administration, calculation, or payment of any Proof of Claim or non-performance of the Claims Administrator, the payment or withholding of taxes owed by the Settlement Fund or any losses incurred in connection therewith.

1An inspection is deemed to be an “initial” inspection if no other inspection was assessed within the preceding sixty (60) calendar days. An inspection within sixty (60) calendar days of a prior inspection is deemed a “subsequent” inspection.

2These percentages reflect Plaintiffs’ Counsels’ assessment of the risk Plaintiffs faced in prevailing on their claims that Wells Fargo’s assessment of inspection fees was unlawful. It is Plaintiffs’ Counsels’ view that this risk arguably varied depending upon whether the inspection was an initial or subsequent inspection and whether the loan in question had reached foreclosure status.

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8. How Can I Get a Payment?

Class Members who fall within the “Active” and “Paid-in-Full” categories will automatically receive a distribution from the Net Settlement Fund to the extent they are entitled under the terms of the Plan of Allocation because their Recognized Claim will be calculated using Wells Fargo’s records.

However, due to the available information with respect to such loans, Class Members who fall within the “Post-Sale” category must have timely completed a Proof of Claim form and provided documentary proof of payment of the property inspection charges claimed. All Proof of Claim forms must have been submitted electronically or postmarked by March 16, 2016.

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9. When Would I Get My Payment?

Appeals have been filed. It is always uncertain whether these appeals can be resolved favorably, and resolving them can take time, perhaps more than a year. It also takes time for all the claim forms to be processed. If there are no appeals and depending on the number of claims submitted, the Claims Administrator could distribute the Net Settlement Fund as early as nine months after the fairness hearing. Please be patient.

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10. What Am I Giving Up to Get a Payment?

If the Settlement is approved by the Court, the Court will enter a Final Judgment. Upon the Effective Date, Plaintiffs and all Class Members, on behalf of themselves and each of the Releasing Persons shall be deemed to have, and by operation of the Final Judgment shall have, fully, finally, and forever waived, released, relinquished, and discharged all Released Claims against the Released Parties, regardless of whether such Class Member ultimately cashes an award check or executes and delivers a Proof of Claim (if required). The terms:

  • “Released Parties” means Wells Fargo Bank, N.A., Wells Fargo & Co., and each of their present and former parents, subsidiaries, divisions, affiliates, predecessors, successors and assigns, and the present and former directors, officers, employees, principals, investors, agents, insurers, shareholders, attorneys, advisors, consultants, representatives, partners, joint venturers, independent contractors, wholesalers, resellers, distributors, retailers, predecessors, successors, and assigns of each of them.
  • “Released Claims” means all actions, claims, debts, demands, causes of action and rights and liabilities whatsoever (including, but not limited to, any claims for violations of RICO, California’s UCL, state unfair and deceptive acts and practices statutes, and claims based upon the alleged breach of any statute, regulation, servicing guideline or investor guideline, including regulations or guidelines promulgated by the U.S. Department of Housing and Urban Development, the Federal Housing Administration, Fannie Mae, Freddie Mac, and any other government sponsored enterprise or private investor), at law or in equity, matured or unmatured, foreseen or unforeseen, known or unknown, suspected or unsuspected, contingent or non-contingent, whether class or individual in nature, against the Released Parties, belonging to Plaintiffs and/or any or all Class Members and/or their respective heirs, assigns, beneficiaries, and successors, and any other Person claiming through or on behalf of them (collectively, the “Releasing Parties”), arising under federal, state, local, statutory, or common law, or any other law, rule or regulation, based upon, arising out of, or relating to, in any way, property inspection fees assessed on a mortgage serviced by Wells Fargo, or Wells Fargo’s practices in ordering or charging borrowers for property inspections, during the Class Period. “Released Claims” do not include claims to enforce any of the terms of this Stipulation. “Released Claims” include “Unknown Claims” as defined in the Stipulation.

The above description of the proposed Settlement is only a summary. The complete terms, including the definitions of the Effective Date and Unknown Claims, are set forth in the Stipulation (including its exhibits), which you may obtain on this website, or by contacting Class Counsel listed in Question 13 below.

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11. Do I Need to Contact Plaintiffs’ Counsel in Order to Receive a Payment?

No. If you have received the Postcard Notice and (i) are eligible to receive an automatic payment, or (ii) timely submit your Proof of Claim as set forth in the Notice, you need not contact the Plaintiffs’ Counsel. If you did not receive a Postcard Notice but believe you should have, or if your address changes, please contact the Claims Administrator at:

Wells Fargo Inspection Fee Settlement
c/o Garden City Group, LLC
P.O. Box 10106
Dublin, OH 43017-3106
Phone: (855) 382-6434

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12. There Will be no Payments if the Stipulation is Terminated.

The Stipulation may be terminated under several circumstances outlined in it. If the Stipulation is terminated, the Action will proceed as if the Stipulation had not been entered into.

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13. Who Represents the Class?

The following attorneys are Plaintiffs' Co-Lead Class Counsel:

Deborah Clark-Weintraub
The Helmsley Building
230 Park Avenue, 17th Floor
New York, NY 10169
Michael R. Reese
100 West 93rd Street, 16th Floor
New York, NY 10025

If you have any questions, you are entitled to consult with Plaintiffs’ Counsel by contacting counsel at the addresses listed above.

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14. How Will the Lawyers be Paid?

Plaintiffs’ Counsel will file a motion for an award of attorneys’ fees and expenses that will be considered at the Settlement Fairness Hearing. Plaintiffs’ Counsel will limit their application for an award of attorneys’ fees to not more than 33-1/3 % of the $25,750,000 million Defendants are paying to settle the Action, plus reimbursement of expenses incurred in connection with the Action in an amount not to exceed $400,000. In addition, each of the Plaintiffs may seek service awards in an amount not to exceed $10,000 for the time and effort they expended in representing the Class. Such sums as may be approved by the Court will be paid from the Settlement Fund. Class Members are not personally liable for any such fees or expenses.

The attorneys’ fees and expenses requested will be the only payment to Plaintiffs’ Counsel for their efforts in achieving this Settlement and for their risk in undertaking this representation on a wholly contingent basis. Plaintiffs’ Counsel have committed significant time and expenses in litigating this case for the benefit of the Class. To date, Plaintiffs’ Counsel has not been paid for their services in conducting this Action on behalf of the Plaintiffs and the Class, or for their expenses. The fees requested will compensate Plaintiffs’ Counsel for their work in achieving the Settlement. The Court will decide what a reasonable fee award is and may award less than the amount requested by Plaintiffs’ Counsel.

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15. Can I Exclude Myself from the Settlement?

The deadline to exclude yourself from the Settlement was December 22, 2015.

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16. If I Exclude Myself, Can I Still Get Money from the Settlement?

No. If you exclude yourself, you will no longer be a member of the Settlement Class and, as such, will not be entitled to recover any money. However, you may sue, continue to sue, or be a part of a different lawsuit against Wells Fargo about the legal issues in this case.

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18. What is the Difference Between Objecting to, or Excluding Yourself from, the Settlement?

Objecting is simply telling the Court that you do not like the Settlement. You can only object if you stay in the Class. Excluding yourself is telling the Court that you don’t want to be part of the Class. If you exclude yourself, you have no basis to object because the case no longer affects you.

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19. What Are My Rights and Obligations Under the Settlement?

If you are a Class Member and you do not exclude yourself from the Settlement, you may receive the benefit of, and you will be bound by, the terms of the proposed Settlement described in the Notice and set forth more fully in the Stipulation, upon approval by the Court.

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20. The Settlement Fairness Hearing

Pursuant to the Settlement Fairness Hearing held on January 21, 2016, the Court approved the Settlement.

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21. Injunction

The Court has issued an order enjoining Plaintiffs and all Class Members, and anyone who acts or purports to act on their behalf, from instituting, commencing, maintaining or prosecuting any action in any court or tribunal that asserts Released Claims against any Released Party, pending final determination by the Court of whether the Settlement should be approved.

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22. What Happens if I Do Nothing?

If you do nothing and you are a Class Member who falls within the “Active” and “Paid-in-Full” categories, you will automatically receive a payment to the extent you are entitled under the terms of the Plan of Allocation.

If you do nothing, and you are a Class Member who falls within the “Post-Sale” category and fail to timely complete a Proof of Claim as set forth above in Question 8, you will get no money from this Settlement. But, unless you exclude yourself, you will not be able to start a lawsuit, continue a lawsuit, or be part of any other lawsuit against Wells Fargo concerning legal issues falling within the scope of the release in the Stipulation.

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23. How Do I Obtain Additional Information?

This website contains only a summary of the terms of the proposed Settlement. The records in this litigation may be examined and copied at any time during regular office hours, and subject to customary copying fees, at the office of the Clerk of Court, United States District Court, Southern District of Iowa, Central Division, U.S. District Courthouse, 123 East Walnut Street, Des Moines, Iowa 50309. In addition, settlement documents, including the Stipulation, may be obtained by contacting the Claims Administrator at:

Wells Fargo Inspection Fee Settlement
c/o Garden City Group, LLC
P.O. Box 10106
Dublin, OH 43017-3106
Phone: (855) 382-6434


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