In March, Tammi Wilson was checking on her family's mortgage online at Wells Fargo when she saw a link to information about COVID-19 on the bank's website. After clicking through, she provided contact information so she could receive materials on programs at the bank. Days later, she said, she returned to the payment page to transmit what she and her husband, David, owed on their loan. A message popped up saying she had no active accounts and couldn't make the payment.
Wilson later learned what had happened. Without her knowledge, the bank had put her into a program that suspended payments on her federally backed loan. Known as forbearance, it is a CARES Act program that aims to help borrowers who are having trouble making their payments because they've been hurt by COVID-19.
Because she hadn't asked for forbearance, Wilson continued to make all her family's mortgage payments. She has also spent hours on the phone with Wells Fargo to get out of the program. Finally, on July 1, the bank sent her a letter confirming her request to "opt out" of the program she said she never opted into.
Still, Wilson's credit report, dated July 18 and reviewed by NBC News, shows that the family mortgage is "in forbearance" and that the April and May payments weren't credited to the account, even though the Wilsons submitted them.
While in forbearance, Wilson and her husband almost certainly can't refinance their mortgage, because most banks won't underwrite new loans for borrowers whose mortgage payments are suspended. As long as the forbearance notation remains in their credit report, the Wilsons can't take advantage of rock-bottom interest rates and are stuck at Wells Fargo.
"I click this button and next thing I know, I'm getting a thing that says I'm deferred and I can't reverse something I didn't even want," Wilson said in an interview. "If you're going to help people, there is a super simple first step — just ask, 'Do you need our help?'"
Under the CARES Act, which provides help on loans backed by the government-sponsored companies Fannie Mae, Freddie Mac, Ginnie Mae and others, borrowers harmed by COVID-19 can ask to suspend their mortgage payments for up to a year. The amounts they owe during the period are either tacked onto the ends of the loans or paid off before. No additional fees, interest or penalties can accrue on the loans while they are in forbearance.
Last week, NBC News reported on borrowers in Chapter 13 bankruptcy whom Wells Fargo had placed, without their permission, in forbearance programs. But the bank's practice extends beyond such specialized borrowers, some of whom contacted NBC News.
Wells Fargo is one of the largest U.S. banks that underwrites and services home loans. Borrowers in at least 14 states have told courts, lawyers or NBC News that they have been forced into forbearance plans by Wells Fargo: Alabama, Arizona, California, Florida, Kansas, Louisiana, Michigan, Missouri, New Hampshire, New Jersey, New York, North Carolina, Texas and Virginia.
"In the spirit of providing assistance, we may have misinterpreted customers' intentions in a small number of cases," Mary Eshet, a spokeswoman for Wells Fargo, said in a statement to NBC News. "In those limited cases, we are working directly with customers to ensure they are receiving the assistance they need and make any corrections to their accounts that may be required."
The statement also said: "As soon as COVID began to impact our customers, Wells Fargo was intently focused on assisting any customers who needed help, and we have deferred 2.5 million payments for consumer and small business customers as a result. During the early stages of the crisis — even before the CARES act was passed — we provided relief to mortgage and home equity customers who we learned were impacted by COVID over the phone, through our secure email channel, or through other means. Customers placed in forbearance received notices of that action through multiple channels, and we removed them from forbearance upon their request."
It couldn't be determined whether Wells might be benefiting from volunteering borrowers for forbearance, and the bank's statement didn't answer that question. By retaining borrowers who might otherwise refinance their mortgages with other institutions, Wells Fargo continues to have their business. Wilson, for example, said she would like to move her mortgage to a different bank but fears she won't be able to given her credit report.
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This isn't the first time Wells Fargo has signed up customers for services they didn't request. The bank has come under pressure in recent years for opening unrequested bank and credit card accounts for clients; it forced others to buy auto insurance they didn't need and, in some cases, weren't told about.
Sen. Sherrod Brown of Ohio, the ranking Democrat on the Banking Committee, called out the bank.
"Once again it seems that Wells Fargo's sloppy service and shoddy management are hurting consumers," he said in a statement. "Wells Fargo should immediately address each of these complaints and make changes to ensure that no borrower finds themselves worse off from actions that their servicer takes without their consent or notice."
Eileen Roth, a math teacher in New Hartford, New York, is another Wells Fargo customer who was placed in an unwanted forbearance. Like Wilson, Roth's forbearance shows up on her credit report.
She said that because her mortgage payments are automatically deducted from her bank account, she doesn't normally worry about them. She hadn't asked the bank to suspend her payments, but on June 22 she got a phone call from Wells Fargo. The representative said that because she had been in forbearance since March 20, her mortgage payments had stopped being deducted.
Roth said she was shocked and angry and told the bank that she wasn't interested in the program. The Wells Fargo employee insisted that Roth "mistakenly" applied for it on the bank's website, Roth said; it wasn't her mistake, she added.
"I was never asked to be put into that program," Roth said. "I started getting anxious that now, by no fault of my own, I have this on my record."
To protect troubled borrowers from harm to their credit reports during the pandemic, the CARES Act states that if a bank makes an accommodation to a consumer — such as suspending mortgage payments — it can't report a change in the borrower's status, such as no longer being current on the loan. But when Wells Fargo reports that borrowers are in forbearance, it indicates a shift in their status, raising questions about the practice.
The Wells Fargo spokeswoman said the bank's "credit reporting for customers in a COVID-19 forbearance is consistent with requirements of the CARES Act, Consumer Data Industry Association guidelines and the expectations of our regulators. These requirements include reporting customers who were current on their mortgage or home equity payments when they entered a COVID forbearance as 'Current' with a special comment indicating the account is in forbearance."
In late March, Gerald Forsburg of Mount Jackson, Virginia, also visited the Wells Fargo website and quickly found himself in a forbearance plan. The plan wrecked the loan modification he had secured from Wells Fargo days earlier, which had reduced his monthly payments by over $200.
Forsburg said he went on the Wells Fargo website to check on the status of his loan modification. "This button shows up — if you've been affected by COVID, click here. I don't remember clicking anything else," he said.
On May 1, when he went online to make his first lower payment under the loan modification, the system didn't let him pay. His account showed only the higher amounts owed under his previous loan. Then, in June, Wells Fargo sent him a letter telling him the suspension of his mortgage payment had been extended for three more months.
"When I clicked on the original button, I didn't know that I was getting a forbearance," Forsburg said. "There was no description of legal ramifications due to clicking on that button. It's very scary for me and my family. We don't want to lose our house."
Thad Bartholow, a lawyer at Kellett & Bartholow, represents Forsburg in a lawsuit against Wells Fargo. He said: "Forbearance is extremely powerful medicine. It's like putting someone on opioids for a minor headache after they told you they didn't want or need anything at all."
According to the Consumer Financial Protection Bureau, before a bank servicing a loan can grant forbearance, it is supposed to receive an attestation of a COVID-19-related financial hardship from the borrower. But none of the Wells Fargo borrowers who shared their stories with NBC News had supplied such documents to the bank.
Eshet, the Wells Fargo spokeswoman, didn't say why the bank doesn't require an attestation from borrowers.