Wells Fargo Sued Over Mysterious Mortgage Fees

Case Overview: A class action lawsuit alleges Wells Fargo improperly charged undisclosed mortgage fees, held onto those funds for over a decade, and then quietly mailed inadequate compensation without explanation.

Consumers Affected: California residents who received letters and checks from Wells Fargo regarding "return to float fees."

Court: Superior Court of the State of California for the County of San Francisco

Wells Fargo improperly charged mortgage applicants undisclosed fees, held onto those funds for over a decade, and then quietly mailed inadequate compensation without explanation, a new proposed class action lawsuit alleges.

The lawsuit alleges the bank duped consumers about “return to float fees” (RTFFs), which are sometimes charged when borrowers opt out of a locked mortgage rate to take advantage of lower interest rates. 

While RTFFs are typically disclosed during the loan process, the lawsuit alleges that Wells Fargo charged them improperly, withheld the profits for years, and only began acknowledging the issue in late 2022.

Plaintiffs Say They Were Caught Off Guard by Fee Refunds

California resident Lance Baird, who took out a mortgage with Wells Fargo in 2010, is leading the lawsuit after receiving a cryptic letter from the bank in December 2022. Enclosed was a cashier’s check for more than $3,200, supposedly covering the improperly charged fees, accrued interest, and compensation for the funds being tied up. 

However, Baird says he never signed a rate lock agreement in the first place, and that the check didn’t address the full financial harm or disclose how the amounts were calculated. Like other recipients of similar letters, he was left confused, with no clear breakdown of what happened or how he was affected, the lawsuit alleges.

Lawsuit Alleges Wells Fargo's Fee Policy Was Murky by Design

At the time of Baird’s loan, Wells Fargo allegedly had a policy of charging borrowers RTFFs, but failed to properly disclose or justify these charges, the lawsuit says. The bank’s own website currently states it does not charge a fee to return a loan to float, which Baird says raises further questions about the past practice. 

The lawsuit claims Wells Fargo concealed the improper charges for over a decade, only to later try to “buy off” customers with vague refund letters that lacked transparency or accountability. Borrowers were given no clear way to assess whether the amount returned reflected the actual financial harm.

Wells Fargo's Financial Misconduct: A Growing Pattern of Legal Trouble

This lawsuit is the latest in a string of legal troubles for Wells Fargo. The bank has faced multiple class actions and regulatory penalties in recent years, including for supporting an alleged ponzi scheme, credit card fee scandals, and mismanagement of mortgage products. 

In other ongoing cases, customers accuse the bank of unlawfully draining personal accounts to pay credit card debt and profiting off client funds without fair compensation.

The lawsuit aims to represent all California residents who received similar letters and checks from Wells Fargo regarding RTFFs. The plaintiffs are seeking damages, a court-ordered trust to hold wrongfully taken money, an injunction to stop the practice, and further penalties under California consumer protection and penal laws. 

Case Details

• Lawsuit: Baird v. Wells Fargo & Company, et al.
• Case No.: 3:25-cv-05959  
• Court: Superior Court of the State of California for the County of San Francisco

Plaintiffs' Attorneys

• Brian S. Kabateck, Shant A. Karnikian, Anastasia K. Mazzella, and Annie Martin-McDonough (Kabateck LLP)

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