Wells Fargo to Pay $56.85 Million Settlement: What You Need to Know

Wells Fargo has agreed to pay nearly $57 million to settle a lawsuit involving how it handled certain home mortgages during the COVID-19 pandemic.

While the bank denies doing anything wrong, it has agreed to the settlement to resolve claims that it damaged the credit scores of some customers.
 

What was the problem?

During the early months of the pandemic, many people faced financial hardship. In response, Congress passed the CARES Act.

Under this law, banks were required to allow homeowners to pause or reduce their mortgage payments—a process called forbearance.

Crucially, the law stated that if a borrower was in forbearance, the bank had to report their account to credit bureaus as "current" (up to date).

The lawsuit claims that Wells Fargo incorrectly reported these accounts, making it look like the borrowers were behind on payments. This mistake could have unfairly lowered customers’ credit scores.
 

Who is eligible for a payment?

Not every Wells Fargo customer is included. According to the settlement, you may be eligible if:
 

1. You own (or used to own) property in California.
2. You had a mortgage through Wells Fargo.
3. Your account was placed in forbearance during the pandemic.

 

Do I need to apply?

No. If you qualify for the settlement, you do not need to fill out an application. Payments will be automatically sent to eligible customers if the court grants final approval.
 

What happens next?

 

• Final Approval: A judge in San Diego is scheduled to decide whether to officially approve the settlement on April 17.
• Opting Out: If you are eligible but do not want to participate, you must file a written objection with the court in San Diego by March 25, 2026.
• Payments: If the judge approves the deal in April, the money will be distributed from the settlement fund to those affected.

If you believe you are part of this group, you may want to keep an eye on your mail for official notices regarding your payment.

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