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Wells Fargo, Fannie Mae sued over illegal foreclosing, reverse mortgages

The AARP Foundation Litigation unit Mehri & Skalet and Kerr & Wagstaffe have filed a class action lawsuit against Wells Fargo Bank and the Federal National Mortgage Association (Fannie Mae) over illegal foreclosures and reverse mortgages.

The lawsuit alleges that Wells Fargo and Fannie Mae have acted illegally in foreclosing and seeking to evict heirs from purchasing their family property at lower prices.

The suit also maintains that the reverse mortgage lenders have failed to notify surviving spouses and heirs regarding rights to purchase the property at the current market value.

AARP Foundation Litigation senior attorney Jean Constantine-Davis said that the class action seeks to ensure that heirs of reverse mortgage borrowers, who are willing, can purchase their family homes.

A suit was filed in March against the US Department of Housing and Urban Development for changing long-established federal rules that guaranteed an heir or surviving spouse to purchase their home at current value.