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Stupid poor people getting mortgages they couldn't afford!
- Thread starter fishbulb
- Start date
lilchikka2005
New member
Wells Fargo Illegally Pushed Borrowers Into Subprime Mortgages, Falsified Loan Documents, Fed Says
WASHINGTON -- Perhaps more than 10,000 Wells Fargo borrowers were inappropriately steered into more expensive subprime mortgages or had their loan documents falsified by bank personnel, the Federal Reserve said Wednesday.
The bank, the largest U.S. mortgage lender, agreed to pay $85 million to settle civil charges. On Tuesday, the company announced that it turned a $3.9 billion profit last quarter. It's made $7.7 billion in profit thus far this year.
The fine is the largest the Fed has ever imposed in a consumer case, the central bank said. It's also the first formal enforcement action taken by a federal bank regulator against allegations that banks steered borrowers into high-cost, subprime loans, it added.
Wells Fargo did not admit wrongdoing.
"The alleged actions committed by a relatively small group of team merabers are not what we stand for at Wells Fargo," John Stumpf, the bank's chief executive and chairman, said in a statement. The bank has already voluntarily compensated 600 customers, the statement said.
The fraudulent activity took place over four years from early 2004 to the autumn of 2008, according to the Fed. The bank must compensate borrowers for losses, some of whom could receive more than $20,000. At least 3,700 borrowers will be compensated, the Fed estimated. Wells Fargo has to review a subset of borrowers who took out subprime loans to determine whether they were illegally steered into more expensive mortgages.
The case is another blow to the bank's once-pristine reputation. It's widely touted as the cleanest mortgage lender of the biggest U.S. banks, even though the company has faced multiple lawsuits alleging it pushed black borrowers toward predatory loans; misled investors about the risks of mortgage-backed securities it sold; and employed so-called "robo-signers," the agents that lenders employed to process foreclosure filings en masse without examining the underlying paperwork.
Last year, as the robo-signing fiasco forced its competitors to make erabarrassing admissions or halt home seizures, Wells Fargo resisted, arguing that its procedures were sound. Depositions in lawsuits later revealed that its employees also acted as robo-signers.
Confidential audits by the the Department of Housing and Urban Development?s inspector general accuse the bank of defrauding taxpayers in their handling of foreclosures on homes purchased with government-backed loans, The Huffington Post reported in May.
Federal investigators concluded that senior managers at Wells Fargo, the fourth-largest U.S. bank by assets, broke civil laws. As part of their investigation, auditors interviewed a pair of South Carolina public notaries who improperly signed off on foreclosure filings for Wells, sources briefed on the findings told HuffPost.
Wednesday's settlement with the Fed also includes allegations of fraud.
In a multi-year investigation, regulators found that Wells Fargo employees altered or falsified borrowers' loan documents, inflating their incomes in order to qualify them for loans.
The bank's internal accountability measures were inadequate to detect and prevent such abuses, the Fed said, at least the second time this year the Fed found Wells Fargo lacking adequate safeguarRAB to prevent abuse and wrongdoing.
Wells Fargo's employees were likely driven to such lengths in order to meet company goals.
The unit responsible for the bulk of the wrongdoing, Wells Fargo Financial, drove its employees to originate a minimum amount of loans or risk losing their jobs, the Fed said. Employees were also expected to hit loan targets in order to receive bonuses.
That unit has since been disbanded. Sixteen former employees have been barred from working in the banking industry, the Fed said.
Investigators also found that borrowers were pushed into more expensive mortgages in part because Wells Fargo employees could boost their bonuses if they hit subprime targets.
Borrowers who otherwise would have qualified for lower-interest mortgages weren't told so, nor were they told that it was "generally more advantageous for the salesperson to sell a nonprime, rather than a prime, loan," the Fed said.
Such practices broke federal consumer protection rules, as well as numerous state laws governing fraud and unfair or deceptive practices, the Fed said.
The Fed's investigation primarily involved mortgage loans originated in Florida, New York, Pennsylvania, Tennessee, Texas and New Mexico. The Fed declined to say what led to the investigation, or provide any details on the actual probe itself.
In addition to compensating harmed borrowers, the Fed also instructed Wells Fargo to pay homeowners whose homes were seized as a result of the bank's wrongdoing the modest sum of $7,000. Perhaps thousanRAB of borrowers were forced to make higher mortgage payments than they otherwise would have made thanks to the bank's actions.
Fewer than 4 percent of the about 300,000 mortgage loans made by the lender during the period under review are eligible for restitution, the company estimated.
*****
Shahien Nasiripour is a senior business reporter for The Huffington Post. You can send him an email; bookmark his page; subscribe to his RSS feed; follow him on Twitter; friend him on Facebook; become a fan; and/or get e-mail alerts when he reports the latest news. He can be reached at 1-917-267-2335 .
I had my suspicions that banks did this, but fucking christ.
WASHINGTON -- Perhaps more than 10,000 Wells Fargo borrowers were inappropriately steered into more expensive subprime mortgages or had their loan documents falsified by bank personnel, the Federal Reserve said Wednesday.
The bank, the largest U.S. mortgage lender, agreed to pay $85 million to settle civil charges. On Tuesday, the company announced that it turned a $3.9 billion profit last quarter. It's made $7.7 billion in profit thus far this year.
The fine is the largest the Fed has ever imposed in a consumer case, the central bank said. It's also the first formal enforcement action taken by a federal bank regulator against allegations that banks steered borrowers into high-cost, subprime loans, it added.
Wells Fargo did not admit wrongdoing.
"The alleged actions committed by a relatively small group of team merabers are not what we stand for at Wells Fargo," John Stumpf, the bank's chief executive and chairman, said in a statement. The bank has already voluntarily compensated 600 customers, the statement said.
The fraudulent activity took place over four years from early 2004 to the autumn of 2008, according to the Fed. The bank must compensate borrowers for losses, some of whom could receive more than $20,000. At least 3,700 borrowers will be compensated, the Fed estimated. Wells Fargo has to review a subset of borrowers who took out subprime loans to determine whether they were illegally steered into more expensive mortgages.
The case is another blow to the bank's once-pristine reputation. It's widely touted as the cleanest mortgage lender of the biggest U.S. banks, even though the company has faced multiple lawsuits alleging it pushed black borrowers toward predatory loans; misled investors about the risks of mortgage-backed securities it sold; and employed so-called "robo-signers," the agents that lenders employed to process foreclosure filings en masse without examining the underlying paperwork.
Last year, as the robo-signing fiasco forced its competitors to make erabarrassing admissions or halt home seizures, Wells Fargo resisted, arguing that its procedures were sound. Depositions in lawsuits later revealed that its employees also acted as robo-signers.
Confidential audits by the the Department of Housing and Urban Development?s inspector general accuse the bank of defrauding taxpayers in their handling of foreclosures on homes purchased with government-backed loans, The Huffington Post reported in May.
Federal investigators concluded that senior managers at Wells Fargo, the fourth-largest U.S. bank by assets, broke civil laws. As part of their investigation, auditors interviewed a pair of South Carolina public notaries who improperly signed off on foreclosure filings for Wells, sources briefed on the findings told HuffPost.
Wednesday's settlement with the Fed also includes allegations of fraud.
In a multi-year investigation, regulators found that Wells Fargo employees altered or falsified borrowers' loan documents, inflating their incomes in order to qualify them for loans.
The bank's internal accountability measures were inadequate to detect and prevent such abuses, the Fed said, at least the second time this year the Fed found Wells Fargo lacking adequate safeguarRAB to prevent abuse and wrongdoing.
Wells Fargo's employees were likely driven to such lengths in order to meet company goals.
The unit responsible for the bulk of the wrongdoing, Wells Fargo Financial, drove its employees to originate a minimum amount of loans or risk losing their jobs, the Fed said. Employees were also expected to hit loan targets in order to receive bonuses.
That unit has since been disbanded. Sixteen former employees have been barred from working in the banking industry, the Fed said.
Investigators also found that borrowers were pushed into more expensive mortgages in part because Wells Fargo employees could boost their bonuses if they hit subprime targets.
Borrowers who otherwise would have qualified for lower-interest mortgages weren't told so, nor were they told that it was "generally more advantageous for the salesperson to sell a nonprime, rather than a prime, loan," the Fed said.
Such practices broke federal consumer protection rules, as well as numerous state laws governing fraud and unfair or deceptive practices, the Fed said.
The Fed's investigation primarily involved mortgage loans originated in Florida, New York, Pennsylvania, Tennessee, Texas and New Mexico. The Fed declined to say what led to the investigation, or provide any details on the actual probe itself.
In addition to compensating harmed borrowers, the Fed also instructed Wells Fargo to pay homeowners whose homes were seized as a result of the bank's wrongdoing the modest sum of $7,000. Perhaps thousanRAB of borrowers were forced to make higher mortgage payments than they otherwise would have made thanks to the bank's actions.
Fewer than 4 percent of the about 300,000 mortgage loans made by the lender during the period under review are eligible for restitution, the company estimated.
*****
Shahien Nasiripour is a senior business reporter for The Huffington Post. You can send him an email; bookmark his page; subscribe to his RSS feed; follow him on Twitter; friend him on Facebook; become a fan; and/or get e-mail alerts when he reports the latest news. He can be reached at 1-917-267-2335 .
I had my suspicions that banks did this, but fucking christ.
garysonthego
New member
No one is arguing that those cases shouldn't be prosecuted to the fullest extent of the law. Fraud is fraud. But that didn't happen in every instance. The vast majority of cases is where high-risk potential borrowers were steered towarRAB packages that would help the bank recoup as much of the cost of the loan as quicky as possible so that when the inevitable loss occurred, they would have made at least a few bucks. It is only logical that a bank, like any other business, would try to steer a customer toward the product or service that makes them the most money. Should I sue McDonalRAB because they keep asking me to "super-size it"?
No one put a gun to any borrower's head to force them to sign the mortgage. If the borrower doesn't understand the paper they're reading, why would they sign it? It is perfectly legal and logical to bring an attorney with you to help you understand legally binding documents before signing them. Why would they not have an attorney with them?
You keep whining about how banks "steered" consumers toward a particular loan package. That's no different than a car salesman "steering" a buyer toward the upscale model with the chrome and heated seats. If you don't need it, and can't afford it, DON'T BUY IT!
No one put a gun to any borrower's head to force them to sign the mortgage. If the borrower doesn't understand the paper they're reading, why would they sign it? It is perfectly legal and logical to bring an attorney with you to help you understand legally binding documents before signing them. Why would they not have an attorney with them?
You keep whining about how banks "steered" consumers toward a particular loan package. That's no different than a car salesman "steering" a buyer toward the upscale model with the chrome and heated seats. If you don't need it, and can't afford it, DON'T BUY IT!
evy is bored!!
New member
Why don't you want poor people to have houses?
odd1_4ever
New member
The point is, is that this fraud was touted as myth for the past 3 years by the people such as yourself.
Socialism for the Rich
New member
[No message]
Anastazia G
New member
It just makes your argument hold very little water.
Wiser with age
New member
You're an idiot.
LuckyLudivine
New member
Which fraud? The actual fraud or the fraud you perceive to have happened?
justin_mcnatt
New member
And how many of these poor folk faked info on their applications?
mschevious123.
New member
You know why this happened? Because banks pushed the government to create regulations which exempt their mortgage loan officers from certification classes, working with a bank loan officer might as well be like working with a fry cook at a restaurant on your home loan, because they require the same level of knowledge.
voicefromparis
New member
.
Do you assert that the person signing the paperwork bears no responsibility for their decision? This is equivalent to a couple walking into Best Buy and being sold a high end television. Should we blame the salesman because the couple were too ignorant to read? Should we blame the company for hiring good sales people? Where should the blame lie? I assert that the blame lies with the individual who made the choice to purchase a thing which they knew they could not afford. There are numerous chances for the home buyer to back out of the deal. There is the Truth In Lending statement, the good faith estimate, the sales contract, the deed, the deed of trust, the mortgage and plenty of other information at the purchaser's disposal, if they bothered to read.
The fact that the free market was skewed by the, largely liberal, government agenda to place the "underserved" communities in housing does not negate individual responsibility.
The fact that the free market was skewed by the, largely liberal, government agenda to place the "underserved" communities in housing does not negate individual responsibility.