BofA, JPMorgan, Wells accused of charging veterans illegal fees

Bank of America Corp., JPMorgan Chase & Co. and Wells Fargo & Co. were among 13 banks and mortgage lenders accused in a so-called whistleblower lawsuit of charging military veterans illegal fees to refinance home loans.

The banks charged fees barred under a U.S. Department of Veterans Affairs program and hid the charges to get government guarantees for the loans, according to the whistleblower complaint brought in 2006 by two mortgage brokers that was unsealed yesterday in federal court in Atlanta.

“This is a massive fraud on the American taxpayers and American veterans,” James E. Butler Jr., a lawyer for the plaintiffs, said in an e-mailed statement. “Knowing they weren’t allowed to charge the fees, the banks and mortgage companies inflated allowable charges to hide these illegal fees without telling the veterans who were the borrowers or the VA they were doing so.”

The Justice Department isn’t joining the lawsuit, according to a Sept. 30 filing by the U.S. Attorney’s office in Atlanta.

The whistleblowers, who worked for Financial Services Inc., doing business as Veteran’s Mortgage Co., accuse the banks of violating the U.S. False Claims Act and seek $5,500 to $11,000 in damages on behalf of the U.S. for each violation.

Lawrence Grayson, a spokesman for Charlotte, North Carolina-based Bank of America, Vickee Adams, a spokeswoman for San Francisco-based Wells Fargo, and Joe Evangelisti, a spokesman for New York-based JPMorgan, declined to comment on the lawsuit.

–Bloomberg News–

Related Topics: Bank Of America Corp., JPMorgan Chase & Co., Mortgages, Wells Fargo & Co.