Why Did Wells Fargo Send Settlement Payments?
If you’ve recently been surprised by an unexpected check from Wells Fargo, it might be tied to a new settlement over mortgage help connected to the COVID-19 pandemic. Back in 2020, a lot of homeowners faced money troubles, and lenders offered forbearance, which means you could pause or lower your mortgage payments for a while. But some customers said Wells Fargo moved their loans into forbearance even when the borrow didn’t ask for it, often just after a brief call or question, not through a real request.
That could hurt someone’s credit score, making it tougher—and sometimes pricier—to get new loans, refinance, and even land a credit card. Due to this, a class-action lawsuit was brought against Wells Fargo, arguing the bank automatically enrolled mortgages in forbearance without alerting customers first, which may have led to lower credit scores and denied credit applications. The bank chose to settle the case—without saying it did anything wrong—so the customers affected first got their checks as part of the deal.
Who Can Get the Settlement?
If you had a Wells Fargo mortgage that went on COVID-19 forbearance and you never clearly said yes to that choice between March 1, 2020 and December 31, 2021, you probably qualify. Co-borrowers count as one for the main settlement, but each one gets a little something extra, too.
The $185 million settlement was given the thumbs-up in December 2024 and started running on February 15, 2025. The first $69 million gets shared equally and is sent out automatically. Everyone gets that same slice, plus each co-borrower adds another $83.33 just for being a co-borrower.
If you faced extra harm—more fees on the loan, or a missed chance to refinance—because you wrongly went on forbearance, you could ask for extra money. The deadline for those extra claims was January 10, 2025.
When and How Will You Get Your Check?
Eligible folks began seeing checks in the mail starting March 2025. These payments come in plain envelopes, so open anything that looks a bit odd. The extra payments for co-borrowers and extra claims will come in later rounds, but they will get sent for anyone who filed on time.
Smart Moves When Facing Bank Trouble
Wells Fargo isn’t alone—other lenders have also been caught messing up mortgage and account rules. The bank paid $3.7 million last year for account errors and $3 billion in 2020 for fake sales.
No matter who you borrow from, check your statements often. Read every notice, and ask why anything looks new. For wrong charges, mistakes, or anything strange, report it right away—first to the bank, then the Consumer Financial Protection Bureau if you’re still stuck.
You can also set alerts to track news on your bank, and if a loan check shows up in the mail, call the number on your bank’s website to make sure it’s real before you cash it.
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