Wells Fargo and Genuine Title have reached a settlement through a $16.2 million class-action lawsuit. The lawsuit that involves a speculated kickback scheme was filed on Thursday at the U.S. District Court for the district of Maryland. The settlement covers over 9,000 consumers.
According to the court papers filed by Smith, Gildea & Schmidt LLC and Joseph, Greenwald & Laake PA, Genuine Title gave kickbacks to Wells Cargo mortgage brokers in exchange for borrower referrals for title insurance and settlement services. Wells Fargo and Genuine Title's arrangement reportedly lasted between 2009 and 2014, according to National Mortgage News. Maryland Attorney General Brian Frosh called the set up as an illegal quid pro quo arrangement.
"Clients at the settlement table had no way of knowing about these kickbacks," Timothy Maloney of Joseph, Greenwald & Laake said. "We are happy this lawsuit brought these practices to light and that we have been able to obtain a significant recovery for consumers of title services."
In January 2015, the Consumer Financial Protection Bureau and the Maryland attorney filed a lawsuit against JPMorgan Chase and Wells Cargo to settle the case involving kickbacks. The Maryland attorney argued that the companies received valuable services in return for giving business to Genuine Title. The JPMorgan Chase and Wells Cargo agreed to pay over $35 million wherein Wells Cargo almost paid the whole amount to regulators and customers, according to Biz Journals.
"This settlement resolves consumer claims related to the same issues involving Genuine Title that were addressed in a January 2015 consent order with the Consumer Financial Protection Bureau, and puts this entire matter behind us," spokesman Tom Goyda said in an email. "We took appropriate corrective action against the team members involved, and have in place procedures to provide strong oversight and monitoring of both the closing agent selection process and our team members' roles in that process."
If the $16.2 million class-action settlement is granted, Wells Fargo will be paying the money after the settlement has been finalized within 90 days.
