Maryland Attorney General Doug Gansler has announced an agreement with Wells Fargo over allegedly deceptive marketing of adjustable rate mortgages. Gansler says the settlement involves mortgages written by two companies Wells Fargo acquired in 2008: Wachovia and Golden West Financial. The settlement will create loan modifications for some customers.
Gansler says Wells Fargo has agreed to pay about $940,000 for restitution to "Pick-a-Payment'' borrowers who lost their homes in foreclosure.
The attorney general's Consumer Protection Division says Wachovia and Golden West did not fully explain to borrowers who chose a loan with payments that were less than the interest actually due that their minimum payments would not cover the full interest and that their principal debt would actually increase over time.