Wells Fargo Accused of Misleading Home Buyers by not Disclosing Foreclosure

Of all the Wall Street Banks accused of fraud and abuses during the housing crisis, Wells Fargo is considered one of the worst perpetrators of fraudulent foreclosure practices such as robo-signing and producing fraudulent paperwork.

And now, Wells Fargo is being accused of misleading potential home buyers by failing to disclose that a home is in foreclosure or is being offered as a short-sale. The bank, in fact, told realtors not to disclose that a home was in foreclosure when listing it for sale. Potential home buyers only find out that a home is going through foreclosure when they place a contract on the property.

This practice causes appraisal errors and affects the home value. Bank-owned properties carry a negative association among potential homebuyer as the properties are often neglected and vandalized because they are empty.

Although this practice is deceiving, a real-estate broker in Palm Beach, Florida, Tyler Smith, who has listed some of these bank-owned properties, said that the practice was in the interest of the community. And those banks want to get as much money out of a home as they can.

Banks have faced much criticism from homeowners and foreclosure attorneys for their deceptive practices. Though a large number of foreclosures have happened simply because the loan holder could not pay, there have also been a number of wrongful evictions based on these deceptions and can be challenged by a foreclosure lawyer.

Homeowners may find it possible to keep their properties if they take action and hire a foreclosure attorney, instead of burying their heads in the sand and ignoring the problem.