Bank fined in ‘shocking’ foreclosure
ALBUQUERQUE, N.M. - A judge has issued a $3.2 million judgment against Wells Fargo & Co. for foreclosing on a man's home after his death, even though he had a purchased an insurance policy through the bank that would have paid the remaining balance on his mortgage.
District Judge Beatrice Brickhouse said the bank's conduct was shocking and so reprehensible that in addition to actual damages, attorney's fees and court costs, she awarded James Dollens' estate $2.7 million in punitive damages.
A spokesman for San Francisco-based Wells Fargo said the bank will appeal and that it disagrees with several parts of the ruling, including the punitive damages.
Dollens had purchased an accidental death mortgage insurance policy for his Rio Rancho, N.M., home that was marketed by Wells Fargo and issued by Minnesota Life. When he died Aug. 18, 2010, in a workplace accident, he owed $125,000 on his mortgage.
His death was reported immediately to Minnesota Life and to Wells Fargo to make a claim under the policy.
But instead of seeking funds from the insurance policy, Wells Fargo sent notices about the loan being in default and referred the loan for foreclosure in December 2010. The foreclosure proceeded despite requests from representatives of the estate to hold off pending the insurance payout.
Wells Fargo said the family should have continued making payments regardless of the insurance policy.