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Friday, February 18, 2011

Philadelphia Homeowner Forecloses on Wells Fargo, And Wins!

Philadelphia Homeowner Forecloses on Wells Fargo, And Wins!

Struggling homeowners dream of sticking it to their mortgage companies. Well, one man is living this dream against Wells Fargo, and he has the Real Estate Settlement Procedures Act to thank.

Patrick Rodgers is doing well for himself. He runs a thriving music promotion business, is up to date on his mortgage, and his house is not "underwater." In fact, his house is arguably worth more than he owes, which is something his mortgage company, Wells Fargo, isn't too fond of.

Mortgage terms generally require that borrowers purchase insurance that covers the market value of the home. This is mainly to protect the lender, as the borrower will have funds to repay the mortgage should something happen to the property. In 2002, Rodgers paid $180,000 for his six-bedroom Tudor, according to The Inquirer. He insured the home for this amount.

But in 2009, the paper reports that Wells Fargo decided that Rodgers' insurance wasn't sufficient. He had to insure the replacement value of the home, which was estimated to be around $1 million.

Refusing to pay the doubled insurance rate, Rodgers sent a "qualified written request," as required by the Real Estate Settlement Procedures Act, asking Wells Fargo to explain the changes.

Under the Real Estate Settlement Procedures Act, if a borrower believes there is an error or wants more information on changes to his mortgage account, he can make a qualified written request to the lender. The request must be written, include identifying information, and explain the situation. A lender must respond within 20 business days, but has 60 days to take action. A failure to comply with these rules results in damages of up to $1,000, plus court and attorneys fees.

Patrick Rodgers took this process seriously. When Wells Fargo didn't respond to his request, he took them to court. Failing to show up, the paper reports that the court issued a default judgment of $1,000 against the company. And when they didn't pay, he turned to the sheriff to collect.

Last month Wells Fargo sent Rodgers a check for $1,000 and a written response, the company told The Inquirer. However, Wells Fargo still owes him court costs and attorneys fees from the lawsuit, which occurred last fall. A sheriff's sale is scheduled at the Wells Fargo office for March 4.

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