Consumer 11.0: Borrower-bank dispute is settled; borrower wins

Wells Fargo, the banking Goliath, apparently met its David in Philadelphia music promoter Patrick Rodgers. On Monday, Rodgers declared victory and put away his sling.

When we first met Rodgers a week ago, he was a man with a complaint about Wells Fargo Home Mortgage. He'd even volunteered his own headline: "Philadelphia homeowner 'forecloses' on Wells Fargo."

It was a slight exaggeration, but Rodgers had indeed taken Wells Fargo to Municipal Court and won a $1,000 default judgment when the mighty bank didn't bother to have anyone show up. When Wells Fargo didn't pay, Rodgers obtained a sheriff's levy to enforce the judgment.

The result was a "Sheriff Sale" poster almost guaranteed to make his story go viral on the Internet: To satisfy the judgment, furniture and other contents of a Wells Fargo office on North Delaware Avenue were scheduled for sale next month.

It was easy to see how Rodgers' tale would resonate with Americans weary of a foreclosure crisis largely caused by the finance industry's foolish practices. Living out a payback fantasy probably shared by millions of Americans, Rodgers quickly became a small-scale national hero.

Other journalists and TV producers even contacted me in search of Rodgers, who I promise is not in hiding. On Monday, someone called from Comedy Central's The Colbert Report. Rodgers - who sports a vampirelike look, owns a Queen Village music store, Digital Ferret, and books concerts for industrial, electronic, or goth musicians - is clearly enjoying his 15 minutes of national fame.

But a legal dispute is a legal dispute, and Rodgers was happy Monday to say he had settled his fight after two conversations with a Wells Fargo officer. He had taken the mortgage company to court without a lawyer and was going it alone till the end.

"I'm certainly pleased that it's over - it was an enormous drain," Rodgers said. He may be getting a kick out of the attention, but he added, "I wish it had been resolved at an earlier juncture without the need for litigation."

Rodgers had won the $1,000 judgment in December after Wells Fargo failed to respond to his questions about charges that added about $500 to his monthly bill - a failure he says violated the federal Real Estate Settlement Procedures Act (RESPA), which gives borrowers the right to expect timely answers to formal questions.

Monday's settlement was plainly worth much more - though neither side was offering details.

Rodgers said Wells Fargo had agreed to reverse thousands of dollars it has charged him since last summer for a "lender-placed" insurance policy the mortgage company obtained on his house after a dispute over whether his original $250,000 in coverage was adequate.

Rodgers owns a 100-year-old Tudor in a beautiful West Philadelphia neighborhood that he describes as "a short clip away from the wrong side of the tracks." But last year, more than six years after Wells Fargo refinanced his original 2002 mortgage, Rodgers' insurance broker delivered some bad news: Wells Fargo was insisting that its borrowers obtain "replacement value" coverage. The broker estimated that rebuilding his home, stone-by-stone and feature-by-feature, would cost about $1 million.

Vickee Adams, a spokeswoman for Wells Fargo Home Mortgage, declined to go into details but confirmed that Rodgers and Wells Fargo had settled their dispute.

"This is a recognition of our miscommunication," Adams told me Monday.

Adams wouldn't discuss particulars, though she didn't dispute Rodgers' version. He said Wells had also promised to undo any damage to his credit reports, and to pay down his mortgage by a sum he said "will adequately compensate me for all the time and energy I put into the legal actions."

Even so, it's unclear how one last feature of the settlement dovetails with the Wells Fargo policy that sparked the fight.

Rodgers said Wells Fargo had agreed to accept coverage based on his home's most recent appraised value, about $255,000.

Adams dances around the issue. She insists that Wells Fargo never told Rodgers that he needed $1 million in coverage, and also insists that - contrary to some news reports - the policy Wells Fargo obtained to protect its interest in Rodgers' home was for the same level of coverage he had previously, not for $1 million.

But if Wells Fargo didn't buy $1 million in coverage for Rodgers, and is backing off that requirement to settle this high-profile dispute, Adams didn't back down on Wells Fargo's overall position.

"Anyone who seeks a home mortgage loan has to agree to have homeowners insurance, and that homeowners insurance must cover the replacement value of the structure and any attachments," Adams says.

Rodgers says Wells Fargo officials told him repeatedly that he needed "full replacement coverage" on his home, and calls Adams' comments "creative semantics."

Parts of this story may still be a little fuzzy. But what's crystal clear is that Patrick Rodgers took on a mighty bank. And he won.