Wells Fargo is currently being investigated by the Office of the Comptroller of the Currency (OCC) for allegedly charging borrowers improper fees during the home loan process.

The investigation stems from a letter sent by a former Wells Fargo employee to the U.S. House Committee on Financial Services and the U.S. Senate Committee on Banking.

According to the letter, Wells Fargo was involved in a “systematic effort to wrongly offload the cost of…Interest Rate Lock Extensions onto borrowers.”

Rate-lock extensions are used when the closing process is delayed and the borrower wants to keep the interest rate originally approved by the bank.

The fee is a percentage of the loan amount and usually costs between $500 and $1,500.

Banks are allowed to charge such a fee only when the borrower has caused the delay.

Wells Fargo, however, “was making a concerted effort to find any way possible to lay any & all blame for delays in the mortgage loan application process into the laps of borrowers/customers.”

The bank did this, “so that they could rationalize having the customers pay for the Interest Rate Lock Extension fees.”

According to the letter, Wells Fargo did this in three ways.

First, underwriters would “note [the borrower’s] file for ‘missing’ customer documentation or information that had already been provided.

Second, loan processors and loan closers would also note “file[s] for ‘missing’ customer documentation or information that had already been provided.”

Finally the bank would simply label their own delays as “customer-caused” or “customer-related”.

Wells Fargo will likely be sanctioned by the OCC if the allegations are substantiated.

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