DOW JONES NEWSWIRES
An Illinois homeowner filed a lawsuit against Wells Fargo &
Co. (WFC) Wednesday, alleging the bank froze millions of dollars in
home-equity loans by falsely claiming that customers' property
values had declined significantly.
The suit alleges the bank failed to accurately assess the values
of customers' homes before deciding there had been a significant
decline in property values. It was filed by law firm KamberEdelson
on behalf of Michael Hickman, who said the credit limit on his
home-equity line of credit account was reduced because of a
supposed "substantial decline" in the value of his home.
The suit alleges Wells Fargo used unreliable computer models
that produced artificially deflated home values and failed to
provide consumers with proper notice of the reductions.
A boom in mortgage-refinancing and growth in consumer banking
boosted Wells Fargo's earnings in its most recent period, although
its report contained hints that troubles among loans it acquired
from toppled lender Wachovia Corp. are growing quickly.
Wells Fargo didn't have an immediate comment.
Wells Fargo's shares were recently ahead 15 cents at $26.49.
-By Kerry Grace Benn, Dow Jones Newswires; 212-416-2353;
kerry.benn@dowjones.com