Wells Fargo will reach out to 110,000 customers who may have been wrongly charged for "mortgage rate lock extension fees" between September 2013 and February 2017, the company said in a press release Wednesday. Four former Wells Fargo employees expressed concern about the way the bank was handling these fees in a letter to Congress last year.
CNN Money explains that the fees targeted Wells Fargo customers seeking mortgages. When someone applies for a mortgage through Wells Fargo, they are offered certain interest rates for that mortgage. If that interest rate offer expires before the borrower closes the loan, the borrower can pay a fee to extend the rate. But if Wells Fargo caused the paperwork delay, the bank would waive the rate extension fee. The bank said Wednesday that Wells Fargo employees may have charged customers the rate extension fee even when the bank was at fault for paperwork delays.
Wells Fargo is now questioning the validity of nearly $98 million in mortgage rate lock extension fees. The bank will begin to reach out to customers later this year and plans to refund the customers who they believe were wrongly charged.
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