mounts were due because Wells had violated the bankruptcy stay because it applied payments

made during the bankruptcy to charges that had not been authorized by the court and thus in
violation of the plan of reorganization. She ruled Wells conduct to be willful and egregious. The
ruling noted (emphasis ours):
Despite assessing postpetition charges, Wells Fargo withheld this fact from its borrower and diverted
payments made by the trustee and Debtor to satisfy claims not authorized by the plan or
Court. Wells Fargo admitted that these actions were part of its normal course of conduct,
practiced in perhaps thousands of cases.
Wells agreed with Magner to remedy certain systemic problems with its record keeping. In this
ruling, the court also awarded Jones over $67,000 in compensatory sanctions.
Four months after the initial ruling on this case, the Stewart case (the one with the clearly bogus
broker price opinions) was filed. The violations were identical to the ones in the Jones case, and this
took place after Wells had agreed to fix this sort of accounting problem . Among other things,
applying payments to fees first, when they are required to go to principal, interest, and escrow first,
which resulted in improper amortization, which then led to additional interest, default fees and costs
being incurred. Those additional charges were done without obtaining approval of the court and
were flat out not permitted (this is a blatant violation of well established procedures in bankruptcy,
hence the vehemence of Magners reaction. And notice this comment from her ruling:
The evidence established the utilization of this application method for every Wells Fargo mortgage
loan in bankruptcy.
To make a long story short, Wells repeatedly engaged in scorched earth tactics:
While every litigant has a right to pursue appeal, Wells Fargos style of litigation was particularly
vexing. After agreeing at trial to the initial injunctive relief in order to escape a punitive damage
award, Wells Fargo changed its position and appealed. This resulted in: