A former mortgage banker is suing his ex-employer for $25 million
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Wells Fargo is facing a wrongful-termination lawsuit in which a former mortgage banker it employed claims the bank used him as a scapegoat for its predatory mortgage pricing policies, the Los Angeles Times reported.
David Eghbali had been one of Wells Fargo’s top mortgage bankers. The bank fired him in 2015 over a scheme in which he worked with an escrow company to shift fees between customers so that some paid more and some paid less. The Consumer Financial Protection Bureau later fined him $85,000 and banned him from the mortgage industry for one year.
Eghbali claims his termination was part of Wells Fargo’s efforts to shift the investigators’ focus to his possible minor violation from the bank’s own predatory mortgage pricing policies. He is seeking damages of at least $25 million.
According to Eghbali, his actions were actually an attempt to shield his customers from fees charged by the bank. These included fees that the bank has since acknowledged were charged improperly, according to the report.
The former employee acknowledges that he shifted fees. However, he claims his customers only paid what they were supposed to. Eghbali claims that he would obtain discounts on an escrow company’s fees so that borrowers who had agreed to a no-fee loan would pay nothing when they later expected to pay. Meanwhile, to make up for the discounted fees, the escrow company would increase its fees whenever Wells Fargo was willing to pay more.
"These transactions had the effect of reducing borrower-paid fees," the lawsuit said.
Tom Goyda, a spokesman for Wells Fargo, said the bank disagrees with the allegations in the lawsuit, according to the report.
Related stories:
CFPB slaps loan officer with $85,000 fine
Wells Fargo will refund up to $98 million in mortgage fees
David Eghbali had been one of Wells Fargo’s top mortgage bankers. The bank fired him in 2015 over a scheme in which he worked with an escrow company to shift fees between customers so that some paid more and some paid less. The Consumer Financial Protection Bureau later fined him $85,000 and banned him from the mortgage industry for one year.
Eghbali claims his termination was part of Wells Fargo’s efforts to shift the investigators’ focus to his possible minor violation from the bank’s own predatory mortgage pricing policies. He is seeking damages of at least $25 million.
According to Eghbali, his actions were actually an attempt to shield his customers from fees charged by the bank. These included fees that the bank has since acknowledged were charged improperly, according to the report.
The former employee acknowledges that he shifted fees. However, he claims his customers only paid what they were supposed to. Eghbali claims that he would obtain discounts on an escrow company’s fees so that borrowers who had agreed to a no-fee loan would pay nothing when they later expected to pay. Meanwhile, to make up for the discounted fees, the escrow company would increase its fees whenever Wells Fargo was willing to pay more.
"These transactions had the effect of reducing borrower-paid fees," the lawsuit said.
Tom Goyda, a spokesman for Wells Fargo, said the bank disagrees with the allegations in the lawsuit, according to the report.
Related stories:
CFPB slaps loan officer with $85,000 fine
Wells Fargo will refund up to $98 million in mortgage fees
