The settlement will provide between $25 and $33 to each of the million class members nationwide affected by Wells Fargo’s actions, Judge Haywood S. Gilliam Jr. wrote for the U.S. District Court for the Northern District of California.
The fund represents 11 percent of the total allegedly improper interest collected by the bank during the class period, the court said.
Class counsel will take one-quarter—$7.5 million—of the fund in attorneys’ fees and $70,000 in costs.
Vana Fowler and Michael Peters alleged Wells Fargo unlawfully and unfairly collected post-payment interest on mortgages insured by the Federal Housing Administration by failing to provide proper notice to borrowers.
Banks may collect interest from the date a loan is paid off through the end of the month but must provide notice to borrowers with noticed approved by the FHA.
The plaintiffs say they were charged interest twice—both by Wells Fargo and by their new lenders after refinancing.
The court also approved incentive awards of $7,500 for Fowler and $5,000 for Peters. But it declined to award six non-named plaintiffs $500 each for their work on the case.
“The court is of the view that incentive awards should be reserved for named plaintiffs, to avoid creating tiers of differently treated class members,” it said.
Epps, Holloway, DeLoach and Hoipkemier LLC; Robins Kaplan LLP; and Turke and Strauss LLP represented the homeowners.
McGuireWoods LLP represented Wells Fargo.
The case is Fowler v. Wells Fargo Bank, N.A., 2019 BL 25624, N.D. Cal., No. 17-cv-2092, 1/25/19.