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Hawkins v Wells

Hawkins v Wells

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Published by DinSFLA

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Published by: DinSFLA on Oct 06, 2011
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12/19/2013

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IN THE UNITED STATES DISTRICT COURTFOR THE WESTERN DISTRICT OF TEXASAUSTIN DIVISIONDAVID A. HAWKINS, and TRACY J.HAWKINS, on behalf of themselvesand all others similarly situated,§§§§§
 
 Plaintiffs,
§
 
§
 
CIVIL ACTION NO. 1:11-cv-877
 v.
§
 
§WELLS FARGO BANK, N.A.,
 
§§§
 
 Defendant.
§PLAINTIFFS' ORIGINAL CLASS ACTION COMPLAINT
Plaintiffs David A. and Tracy J. Hawkins ("Plaintiffs"), by and through their attorneys, bring this action on behalf of themselves and all others similarly situatedagainst Wells Fargo Bank, N.A. Plaintiffs hereby allege, on information and belief,except as to those allegations which pertain to the named Plaintiffs, which allegationsare based on personal knowledge, as follows:
I. INTRODUCTION
1.
 
Plaintiffs bring this action against Wells Fargo Bank, N.A., including itsdivision Wells Fargo Home Mortgage, and Wells Fargo Home Mortgage's divisionAmerica's Servicing Company ("Wells Fargo" or "Defendant") on behalf of Texasresident home equity loan borrowers who received loan modifications by Defendant,acting as lender or servicer of home equity loans.
Case 1:11-cv-00877 Document 1 Filed 10/06/11 Page 1 of 20
 
1:11-cv-877 Hawkins Original Class Action ComplaintPage 2
2.
 
Defendant made Texas home equity loan modifications that did one or more of the following in violation of the Texas Constitution's homestead protection provisions: (1) turned past-due interest into new principal; (2) featured a loan-to-valueratio to a figure above 80%; and (3) failed to include mandatory disclosures concerningthe protections afforded by the Texas Constitution concerning home equity loans. These problems are unique to home equity loans, as opposed to original purchase-moneymortgage loans, which are not at issue in this case.3.
 
Defendant knew or should have known these home equity loanmodifications violated the following provisions of the Texas Constitution:
 
Article XVI Sec. 50(a)(6)(L).
That constitutional provision mandates thatany modification of a home equity loan be repaid in "substantially equal"installments that "equal or exceed the amount of accrued interest as of thedate of the scheduled installment." A home equity loan with interest arrearswould not be a proper candidate for a modification unless (1) the borrower caught up past due payments or (2) the lender waived accrued interest as of the date of the modification.
 
Art. XVI Sec. 50(a)(6)(B)
. The home equity loan modifications featured aloan-to-value ration in excess of 80%, the maximum allowed by TexasConstitution.
 
Article XVI Sec. 50(g).
Even after Defendant learned that its practicesviolated the Texas Constitution, it continued making misrepresentations toTexas home equity borrowers that was intended to cause, or did cause, those borrowers to lose their homes. What Defendants did was threaten foreclosure
Case 1:11-cv-00877 Document 1 Filed 10/06/11 Page 2 of 20
 
1:11-cv-877 Hawkins Original Class Action ComplaintPage 3
they knew they couldn't legally bring while at the same time pressure borrowers to short-sell their homes or give over a deed in lieu of foreclosurein order to avoid the more devastating prospect of foreclosure, whichinvolves deficiencies of loan balances and wrecked credit.4.
 
Violations of the relevant provisions of the Texas Constitution entail thelender's forfeiture of the loans or inability to enforce the lien.5.
 
There is another layer to Defendants' deceit that is even more insidious.Wells Fargo is fond of blaming borrowers for getting behind on payments. However, inthis case, Wells Fargo affirmatively induced or required borrowers otherwise current ontheir loans to incur interest arrearages
ostensibly in order to qualify them for the loanmodifications
. Yet these induced missed payments just put borrowers behind andtherefore subject to foreclosure. Indeed, Wells Fargo brought foreclosure proceedingsagainst named Plaintiffs the Hawkins precisely owing to the payments the Hawkinsmissed at Wells Fargo's behest.6.
 
Plaintiffs therefore bring this class action on behalf of themselves and allothers similarly situated asserting violations of the Texas Constitution Article XVISections 50(a)(6)(B), 50(a)(6)(L), and 50(g). Plaintiffs seek damages and equitable relief on behalf of the Class, which relief includes forfeiture of loan balances; a payment byDefendants of $1,000.00 per subject loan and refinance or remedy that otherwisecomplies with the Texas Constitution; disgorgement of all payments made by borrowersunder the illegal home equity loan modifications, interest and charges incurred by or assessed against class members by Defendants during the pendency or processing of aloan modification; a permanent injunction halting foreclosure or misrepresentations
Case 1:11-cv-00877 Document 1 Filed 10/06/11 Page 3 of 20

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