A class action lawsuit filed yesterday in Baltimore County says Wells Fargo bank should repay hundreds of thousands of dollars it overcharged Maryland residents in recent home refinancing deals.
According to the lawsuit, the San Francisco-based bank charged some refinancing customers an unnecessary tax, and then passed that money onto the homeowners' county governments.
"Most of these people have no idea that they've overpaid these taxes," said Matthew Azrael, the Towson attorney who is representing the plaintiffs.
Now that the bank knows that many of its customers were, in fact, exempt from recordation taxes, it should return the money, the lawsuit says.
A Wells Fargo spokeswoman said yesterday that the company's legal department was looking into the lawsuit. She said she could not comment on the case further.
In July, Wells Fargo spokesman Alejandro Hernandez said the company had overcharged some customers because of misunderstandings in the bank's home mortgage unit, according to the Associated Press. It should have been claiming the tax exemption for its customers, but instead was paying the full tax, he said.
At that time, Hernandez said the bank would not ask counties to return the money.
Lawrence and Karen Adashek are the named plaintiffs in the case filed yesterday. The Baltimore County couple refinanced two mortgages this year, Lawrence Adashek said, hoping to take advantage of historically low interest rates.
But when Adashek compared the settlement sheets from the refinancing on his first mortgage with the one from his second, he saw that only the second refinancing, the one handled by Wells Fargo, charged him recordation taxes.
Adashek said he called his settlement officer and asked about the charges. The settlement officer told him that he, like others involved in similar refinancings, was exempt from those taxes, he said.
In total, according to the lawsuit, Wells Fargo had charged Adashek $325.50 extra. Adashek called his lawyer.
"I saw the fact that if Wells Fargo had done this to me, they've done this to a huge number of people," Adashek said.
Azrael said thousands of Maryland residents may be in similar situations. He pointed to numbers from Frederick County, which show that in just four days of refinancings this year, more than $137,800 had been overpaid in recordation taxes. Most of those cases were from Wells Fargo-handled refinancings.
The lawsuit alleges negligence, breach of contract and violations of the Maryland Consumer Protection Act.
As a class action, the lawsuit would try to collect damages for all Maryland residents whose situations are legally similar to the Adasheks'.
The suit asks for compensatory damages to cover the amount of excess taxes paid by homeowners, money to cover any additional interest and attorneys' fees.