Wells Fargo Is Paying $56.85 Million Over COVID-Era Mortgage Reporting

Wells Fargo has agreed to pay $56.85 million to settle a class action lawsuit over how it reported mortgage forbearances during the COVID-19 pandemic.

Here's what happened. When the pandemic hit in 2020, Congress passed the CARES Act to help struggling borrowers pause their mortgage payments without taking a credit score hit. The law required lenders to keep reporting those paused accounts as "current" — as if payments were still being made on time. The lawsuit alleges Wells Fargo didn't do that. Instead, it allegedly reported some accounts as "in forbearance," which could have damaged customers' credit scores and made it harder to qualify for new loans or refinancing.

Wells Fargo did not admit any wrongdoing but agreed to the settlement rather than continue fighting the case in court.

Who's eligible?

This settlement is limited to California residents. To qualify, you need to have had a Wells Fargo mortgage on a property located in California, been current on your payments, and received a CARES Act forbearance on or after March 27, 2020 — with Wells Fargo then reporting your account as "in forbearance" to a credit bureau.

How much will you get?

The exact amount depends on how many people are in the class, but estimates put individual payments in the range of $100 to $150.

How to File

Here's the good news: you don't have to do anything to file. If you're eligible, a check will be mailed to you automatically after the settlement receives final court approval on April 17. Just make sure your mailing address is up to date.

Download ClassyAction to stay updated on this settlement and get notified when payments go out.