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Chicago Lawyer Seeking Class Actions over HELOCs Against Wells Fargo, Chase, Others

By AppraiserLoft Team | September 15, 2022

By: Darrell Delamaide

Wells Fargo, JPMorgan Chase, and other major banks are fraudulently closing down home equity lines of credit (HELOCs) just when consumers need them the most, Chicago attorney Jay Edelson is alleging on behalf of a number of clients in lawsuits that seek class action status.

Edelson has embarked on a crusade against the banks for suspending HELOCs when a computer program tells them – falsely, he claims – that a borrower’s house has declined in value. Failing that, he charges in another case, the banks find some spurious “material change” in the creditor’s profile to justify the suspension.

In a flurry of lawsuits and press releases, the plaintiff’s lawyer has attracted nationwide attention.

Edelson filed a suit against Wells Fargo Bank on behalf of Michael Hickman, of Westmont, Illinois, claiming that Wells Fargo used computer models to determine home values instead of having licensed appraisers do the job. The bank did not give customers sufficient notice of either its intent to re-appraise the home or the possible consequences, the suit alleges.

The Wells Fargo case is similar to an earlier lawsuit filed by Edelson against JPMorgan Chase on behalf of Pascal Majon of Zion, Illinois, who claims Chase denied him access  to his HELOC account due to a purported substantial decline in the value of his home. In reality, Edelson said, Majon’s home did not decline in value.

Majon’s case is part of a fraud to deny customers access to millions of dollars in their previously approved home equity lines of credit, the suit alleges. The bank intentionally used falsified home appraisals to freeze home credit lines, according to the suit.

One of the arguments in the lawsuits is that Wells, Chase, and other banks are engaging in these allegedly unfair practices even after accepting government bailout funds.

“Rather than honoring their promises to Congress and to the American people that they would use the bailout money to get credit flowing again,” Edelson said in his press release about the Majon case, “banks like Chase seem content to deny people access to their credit when they need it most.”

Edelson said his firm, KamberEdelson LLC, has filed other class actions against Washington Mutual (now a Chase subsidiary) and Citibank over similar HELOC practices.

In another case against Wells Fargo, the Edelson client, Marika Hamilton, alleges that the bank fraudulently suspended her HELOC by claiming a late charge of $25, that was put on her credit report in error, constituted a material change in her credit profile.

The lawsuit goes on to claim that Wells Fargo employees bullied her when she protested the suspension.

“Wells Fargo caused a late charge to be put on Ms. Hamilton’s credit report that never should have been there to begin with. It then used that item to justify suspending her entire credit line,” Edelson said of the case. “Adding insult to injury, the bank then threatened her and her business if she dared to stand up for herself. This is what Wells Fargo has done with the $25 billion in bailout money. Illegality aside, it’s flatly appalling.”

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