Wells Fargo has reached a $16.2 million settlement in a class-action lawsuit regarding an alleged kickback scheme involving the shuttered Owings Mill, Md.-based Genuine Title.
Smith, Gildea & Schmidt LLC and Joseph, Greenwald & Laake PA filed a motion to approve the settlement in U.S. District Court for the District of Maryland on behalf of more than 9,000 consumers allegedly affected by the scheme, according to a press release Thursday. A spokesman for Wells Fargo confirmed the amount of the settlement.
The lawsuit claimed that Genuine Title provided kickbacks to Wells Fargo mortgage brokers in return for borrower referrals for title insurance and settlement services. The arrangement reportedly lasted from 2009 to early 2014.
Altogether, the settlement applies to roughly 9,500 loans that Wells Fargo originated.
"Clients at the settlement table had no way of knowing about these kickbacks," Timothy Maloney of Joseph, Greenwald & Laake said in the release. "We are happy this lawsuit brought these practices to light and that we have been able to obtain a significant recovery for consumers of title services."
The lawsuit against Wells Fargo is the first involving Genuine Title to have reached a settlement; the plaintiffs have cases against nine banks and mortgage companies in addition to Genuine Title and three marketing companies it runs.
If the settlement is approved, Wells Fargo will be responsible for paying out the funds, which must be rewarded within 90 days after the settlement is finalized.
The Consumer Financial Protection Bureau and the Maryland attorney general
That complaint also cites former Wells employee, Todd Cohen, and his wife, Elaine Cohen, demanding they pay a $30,000 penalty for their involvement. Wells has said that all employees implicated in the case were terminated.
