Wells Fargo Settles State AG Investigations Into “Risky Mortgages” Made By Acquired Lenders

Wells Fargo Settles State AG Investigations Into “Risky Mortgages” Made By Acquired Lenders

Posted on October 7, 2010 by Fred Rivera

October 7, 2010 –  The New York Times reports that Wells Fargo agreed to pay $24 million to resolve investigations by eight state attorneys general into whether lenders acquired by the bank made risky mortgages to consumers without disclosing the risks.   Wells reached the agreement was with attorneys general in Arizona, Colorado, Florida, Illinois, Nevada, New Jersey, Texas and Washington.  The AGs were investigating the lending practices of Wachovia Corporation and a California company it acquired, World Savings Bank. Wells bought Wachovia in late 2008, after Wachovia had already stopped making the loans under investigation.

The AGs were investigating whether the lenders had engaged in deceptive practices in connection with option adjustable-rate loans, or “pick-a-payment” mortgages as marketed by Wachovia. Those controversial loan products allowed borrowers to defer some interest payments and add them to the principal balance.  Many contend that the option adjustable-rate mortgages were one of the most toxic mortgage products available in the marketplace.  The balance and interest reset caused by deferring interest payments often causes a significant jump in the loan’s monthly payments and can result in a mortgage that is underwater.

As part of the settlement, Wells agreed to offer loan assistance potentially worth more than $770 million to more than 8,700 borrowers. The $24 million will be used to help states reach out to customers who may benefit from the loan assistance program.  The agreement includes no admission of wrongdoing by Wells.

18 Responses

  1. Apple,

    You and I discussed this frustrating Wells Fargo settlement the other evening via e-mail. I’m sick of these ridiculous settlements! As far as I’m able to see, they help the AG’s, not the homeowners.

    Who confirms each and every line in these settlements contracts is followed? I want DETAILS!! Who confirms which homeowners really get the help? I want a list of homeowner names and phone numbers, who can be called and confirmed by someone other than Wells Fargo. Who holds Wells Fargo accountable?

    Once a company had committed a fraudulent act, they should have to prove they are once again trustworthy. Wells Fargo has not proven itself trustworthy. They have to re-earn consumer trust.

    Wells Fargo claims they have already given $3.4 billion in principal forgiveness. See how quickly they begin to back pedal? If Wells, did IN FACT, gave $3.4 billion in principal forgiveness to anyone, anywhere, then confirming they did so should not be difficult to do — by a party other than Wells Fargo.

    Why do we never hear from euphoric homeowners given a portion of that $3.4 billion in partial principal forgiveness? Has anyone? Are they sworn to secrecy?

    I want some answers for a change.

    Kelly L. Hansen

  2. Apple,

    Your attorney needs to possibly use BK court to get that loan kicked to the wind. If he does not know how, you may need a different attorney. Brian Davies has posted about someone who knows what he is doing and I vouch for that attorney also.


    Come on folks, have you not read any of my comments where I posted about the cozy relationship mealy-mouthed, slime-ball Jerry Brown has with the banking industry?

    JERRY’s SISTER is KATHLEEN BROWN. Look her up. She is upper management now with Goldman-Sachs. Before that, she was on the board with BofA and CountryWide. And yes, she was in the positions with BofA/CW when her brother-dearest worked out the abomination of a ‘stipulated settlement’ with CountryWide/BofA,

    Just like with the settlement we see from his office now with WF, the previous agreement also did not require any specific loans to be modified.

    Beware if you DO get a ‘Jerry Brown’ modification from ANY institution. His office will not do anything if the banksters breach your SIGNED modification.

    All the ‘AG Mods’ issued by CW/BofA are claimed to have ‘canceled’ per the CW employees! AG Brown’s office KNOWS and will do NOTHING about it.

  3. So tell me now that the ag for California has made Wells Fargo admit they made a mistake in buying the toxic loans they still have their way about who gets them and who doesn’t. Why doesn’t Jerry Brown force the guidelines for WF so EVERYONE who got a shitty Pick a payment loan CAN get a modification not just who they say are quallified! Pisses me off I made my payments and they started returning them and started foreclosure. This has been 3 years of fighting finely they admit they were wrong in what they did but ” I don’t fit their program” F–K BANKS!! I have a attorney but it is just more money to fight bigger money to get them to do what is right! I hate our government for being so lame. To top it off a SF cop who worked in the crime lab admits to stealing cocaine from crime evidence lab and she walks. I want to know who she knows!

  4. My mortgage was with World so the above applies. I had an investor who had requested proof of deed before tranfering funds. The attorney for the bank would not or could not produce the deed or title or offer any comfort that same would be forthcoming.

    This in Michigan I went to court and the judge not only agreed that the banks attorney owed no duty but refused me time to gather evidence as well as a jury trial. With this new information what recourse might I have ? dkanka@hotmail.com

  5. Can a homeowner in Ma who has a loan originally from World Savings which is a pick a pay and now is with Wells Fargo sue and or get help somehow?

  6. Angry & NOT TAKING IT

    Yes, and WF is also trustee and servicer for many trusts. But, if WF is not actually executing assignments/affidavits that have WF’s name on it, then, WF will claim they are doing nothing wrong – someone else is doing it. But, WF should know by now that THEIR name is on all these documents.

  7. So time for new atty generals perhaps. Kick the bums out?

  8. Yep, this deal that WF got really reminds me of the ‘deal’ I personally got out of the CA AG settlement with CountryWide. That PERMANENT mod was simply a SET-UP for BofA to then foreclose.

    I now have some additional strange paperwork from the servicer the loan was moved to AFTER the loan was in default (and the loan mod had been signed). That paperwork would have you believe that in 2010, they can put a loan in default INTO a pool that should have closed back in 2005.

    How many ways can they break the rules of the PSA agreements? If this loan indeed was not assigned to the pool until the attempt this year, I can not see why the Trustee for the pool even would have them DO this assignment. That trustee knows, or should know, of the default status due to the court case last year (where I tried to get the signed mod honored, Ha ha, laughs on me.)

    The investors should be demanding that the loans ALL be bought back, not ADD any defaulted loans to the mix. Of course, since the servicer continues to make the payments, the actual investor(s) may not have info on the true status of the mortgage.

    Are the Trustees for the pools making any attempt to work in the best interest of the investors?. Well, of course if there WERE from the BEGINNING, then this LATE assignment would not be NEEDED.

  9. wait&watch….Wells Fargo is the major doc custodian for ALL THE MAJOR BANKS……
    this is or will be ugly for us…
    Does any one know if you file a lawsuit BEFORE a class action is settled, if your rights to pursue “your” claims are preserved , remain intact or are some how affected by this hypothetical class action settlement [these AG will surly reach to our misfortune], they will also help bury the bodies & with the rotting loans, our potential for recovery..

  10. Wells Fargo claims no fraud but I had no Private Mortgage Insurance upon the creation of my loan. They still went and created a private policy between themselves and AHMSI. They not only cashed in on my deposit they also collected on the default Lender Paid Mortgage Policy which I had no knowledge of. Nice try Wells Fargo.

  11. $24 million would just mean somebody would have to wait for their yacht. Th ASSISTANT VP I email is mark.oman@wellsfargo.com Mark’s bonus was $12 million this year up from $3 million last year.
    email him His cronie will respond the next day.
    Racine WI

  12. Why on God’s green earth would the attorneys general agree to allow Wells Fargo to torture their at-risk customers even further?

    Essentially, by giving Wells Fargo a THREE YEAR window in which to determine eligibility …Wells Fargo is given an undeserved opportunity to sit back and say “we’ll see who keeps making their payments, we’ll see who doesn’t challenge our fraudulent mortgage assignments, we’ll see who doesn’t join a class action lawsuit against us, we’ll see which homes increase in value, we’ll see to whom we’d like to extend our favors.”

    October 6th Press Release
    “Wells Fargo & Co. (NYSE: WFC) announced today that beginning Dec. 18, 2010, through June 30, 2013, at-risk Wachovia Pick-a-Payment customers may be eligible to earn principal forgiveness by making on-time mortgage payments. ”

    Where can we find the real details regarding the settlement? Who confirms the $794 million is ever issued? I would like to know how much of these settlements really gets paid homeowners, and when. Moreover, if not to homeowners, to who, and why.

    I want a list of names and phone numbers. Who holds Wells accountable?

    Wells Fargo claims they have already given $3.4 billion in principal forgiveness. SOMEONE should be able to confirm that Wells IN FACT gave $3.4 billion in principal forgiveness to the correct, entitled homeowners.

    Why do we never hear from euphoric homeowners who have been given principal forgiveness? Has anyone?

    Kelly L. Hansen

  13. once again, the fact of the matter is that all those temp loan mods are a fraud, they will foreclose on you, they have foreclosed in four of my neighbors with the same deceptive crap.

    the lawyer in Virginia is getting ready to file in fed cour

  14. Fine…let them settle these aquired asset issues. However, there MUST NOT BE settlements as to the rampant fraud that we know is going on daily by these players. These can only be dealt with through the tightening of cuffs behind backs.

  15. WHAT A JOKE! The $24m is basically Hush money to the AG’S, and the $770m is a sham designed to HELP NO ONE!

    Unfortunately, if you want relief, Strategically default is the best bet!

  16. Another joke AG settlement. We’ve yet to see anything come from the BofA AG settlement. The money is not being used to modify our loans the way it was intended.

  17. I have fraudulent paperwork Wells Fargo from your thousands of robosigners. Your attorneys are fabricating paperwork. I will get my home back formy 91 year old evicted mother. I will fight you until I can’t suck air.
    Racine Wi

  18. I see that Wells did not admit wrongdoing on these loans. It looks like they squeaked out from under possible criminal charges. Is the loan assistance to refinance loans? Do people get to stay in their homes? We should revisit these loans and these homeowners in six months and see if the bank lives up to the agreement. The banks’ arrogance has grown exponentially, and they will have to have their feet held to the fire.

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