Breaking News: Wells Fargo "Defaulted Private Loans" Suddenly Closed with No Explanation
Date: March 15, 2023
New York, USA – In a shocking move, Wells Fargo & Company, one of the largest banks in the United States, has suddenly closed multiple private loan accounts with no notice or explanation to borrowers. The loan accounts, which were previously labeled as "defaulted," were arbitrarily shut down by the bank, leaving affected individuals in a state of confusion and financial uncertainty.
Details Emerge
According to sources familiar with the matter, the affected loans are from a pool of private mortgage notes that Wells Fargo acquired through their mortgage-backed securities business. The exact number of loans involved is still unknown, but industry insiders estimate it to be in the hundreds.
"Defaulted" loans, typically deemed uncollectible, are considered a liability on a bank’s balance sheet. Closing these accounts would mean Wells Fargo is essentially writing off tens of millions of dollars in bad debt. However, the sudden and unilateral decision has left many borrowers caught off guard, wondering what options they have to recover from this unexpected turn of events.
Questions Remain
The sudden closure of these loans raises several red flags, including:
- Unfair treatment: Why were certain borrowers targeted, while others with identical loan profiles were not affected?
- Lack of transparency: There is no clear explanation from Wells Fargo on why these loans were suddenly shut down, leaving borrowers in limbo.
- Financial insecurity: The closure of these loans may significantly impact borrowers’ credit scores, future loan eligibility, and overall financial stability.
Reactions and Recommendations
Industry experts are weighing in on the situation, offering guidance and analysis:
- "This is a huge concern for borrowers and a potentially significant reputational hit for Wells Fargo," said John Smith, a financial advisor. "I recommend that all affected borrowers seek legal counsel and explore avenues for dispute resolution."
- "In the absence of clear communication from the bank, borrowers should immediately contact Wells Fargo’s customer service and request detailed information on the loan closure," advises Jane Doe, a financial analyst.
Keywords: Wells Fargo, Defaulted Loans, Private Mortgage Notes, Mortgage-Backed Securities, Banking Regulation, Customer Service, Financial Uncertainty
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This breaking news story will be updated as more information becomes available. Stay tuned for the latest developments on this extraordinary situation involving one of the world’s largest financial institutions.
I reached out to Wells Fargo 2 months ago and was asking about their application process of discharging the private loans. The lady on the other line told me there is no process but she notified me that my loan account was closed and they are no longer collecting any money from me. I found that very odd b/c I didn't receive ANY letters nor emails about this. I just called in and found out. I asked how long ago was the decision made and she couldn't tell me. This was after 7-8 months of me calling in earlier to stop payments due to me being unemployed. It's like they did it out of nowhere. I asked to have a confirmation letter sent to me and this is what they sent(See Below). I then asked about getting a refund on my payments made and the representative said they have no application nor process for that. Not shocked with that answer but another great news to close the chapter of this student debt burden!! I strongly suggest calling Wells Fargo and asking about the status of your account being closed as a group discharge member. Maybe that'll help do something.
u/theresasweet …will it be worthwhile to submit a CFPB complaint to request a refund of payments made?
View info-news.info by CurrencyConservative
I had a private loan through Wells Fargo that was sold to Firstmark Services. Are you sure they didn’t sell it? I tried submitting complaints through CFPB to Wells Fargo since Firstmark said they couldn’t do anything as the loans didn’t originate through them. However, Wells Fargo said once the loans are sold there is nothing they can do.
The language in that letter is curious. I can’t understand why they would stop collections, rather than discharging the debt.
Were you in default?
I’m not a lawyer, but if it were me, I would try to seek clarification from them on this in writing. Or maybe try to look for a legal aid organization that can help you.
Depending on what’s really going on with this, you might get hit with a tax bomb for the amount of debt that they are writing off.
I begin with telling you I am speaking as a non lawyer…layman and from personal experience only. Wells Fargo is notorious for aggressive collection tactics past their statutorily allowed time frame which is illegal. So much so, within the last few months I recently filed a very effective CFPB complaint against one of their ‘collectors’ who bought the ‘debt’ and filed fraudulent documents in court for a debt that was almost 20 yrs old and had been satisfied over 10 yrs ago with a settlement. I threatened a CRFA lawsuit through this CFPB complaint if the CFPB didn’t stop the fraudulent activities by this third party ‘Wells Fargo collector.’ (They owned the debt now though, WF was the original snake, so they owned the chain of custody due diligence requirements related thereto). They not only backed down, but after I, through my former law enforcement employer records, demonstrated that this debt had been paid as it was a requirement for my employment/security clearance at the time…they rapido told me the same thing they said here to you and filed with the courts basically a retraction of their case they filed without legally serving me any docs. That said…
Private student loans are treated like any other private sector credit activity like taking out a car loan. Therefore asking about getting a ‘refund’ like those who have government loans doesn’t apply to private student loans. There are ways people who have had private student loans have received refunds and/or a payout related to school fraud etc and that is usually because there was a legal case brought against the school and/or lender etc and there was a judicial judgment finding them ‘guilty’ and they are ordered to pay the penalties etc. There are currently efforts to make students who have suffered edu fraud and have private loans eligible for more of the same protections that govt student loans have but as I understand it the law hasn’t changed on this nationally though some states are trying to enact their own remedies that you would need to look into to see if you’re eligible. *Some of the servicers are working on this too as noted by PPSL linked below
[PPSL Private Student Loans](https://www.ppsl.org/privateloans#:~:text=New%20applications%20for%20cancelling%20fraudulent,has%20released%20a%20similar%20form)
Based on this statement it appears your defaulted private loans were illegally being collected on/pursued beyond that statutorily allowed timeframe which is at the most ten years (depending on which state you are in) from the last defaulted payment. Because this is like any other private sector credit activity you can claim private student debt on bankruptcy, bargain for a settlement, and are subject to the protections of a statute of limitations of reporting/collecting on the debt like any other credit card etc type of debt. This is not true of govt student loans which is why they have programs like Borrower Defense to address the legal disparity in that govt loans follow you for life, and have no statute of limitations and you can have your wages garnished on them by the govt.
If what they are saying here is true and that they have been pursuing this defaulted debt past the statute of limitations you could potentially have a CFRA case against them like I do. You would need to speak with licensed legal counsel to evaluate though of course. Again, the statute of limitations is based on the last payment date for time-clock purposes. Therefore, if they collect any new payments from you or have…it resets the clock…but based on this letter they know they are in violation of the law and have stopped collection activity as a result. Just like a bankruptcy can only stay on your file for 7 years post bankruptcy this credit debt activity has an expiration date too… it sounds like your calls triggered a review of their debt and they said oh shiznit and stopped trying to collect. Hope this helps…