Wells Fargo

Another Slap on the Wrist for Bad Bank Wells Fargo

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wrist slap
Wow, Wells Fargo is guilty of pushing well qualified home owners into subprime loans and ripping them off.

Wells Fargo Financial, the lender’s consumer- finance unit, pushed customers who may have been eligible for prime interest rates into loans carrying higher rates intended for riskier borrowers, the Fed said today in a statement announcing the settlement. Separately, sales personnel used false documents to make it appear borrowers qualified for loans when their incomes made them ineligible.

The Financial unit was of course shut down when their evil doings started to be exposed. Who is taking the rap? Not Wells Fargo executives, nope, 16 of the fired employees will be banned from the banking business. The guy who oversaw this operation, Mark Oman? He gets to retire.

This measly $75 million dollar fine is being touted as a record. Worse, harmed homeowners might have to be compensated up to $10,000! Wow! $10k when you've lost your home, awesome! That might pay for the moving van.

Credit slips is warning victims to watch out for settlement papers, getting them to sign their right to sue away for the paltry sum of $7000.

As far as I could tell the agreement does not provide for consumers to release claims in exchange for these paltry sums, but advocates would be well advised to review settlement notices with affected consumers carefully.

Massachusetts Surpeme Court Says No to the Banksters' Foreclosure Mill

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Finally, some in this country are actually paying attention to the law. Wells Fargo and U.S. Bancorp just lost their Foreclosuregate case in Massachusetts. The Supreme Court of Massachusetts just ruled against them. The case boils down to if the bank cannot locate the paperwork, too bad, they cannot foreclose, even when they bundle these things up in derivatives and trade them like baseball cards.

Financial Times has the background on the case itself and gives one of the court rulings on securitization of mortgages with respect to foreclosures:

The Land Court then proceeded to find that (1) neither Appellant had a valid assignment of mortgage at the time of publication of the notices or at the time of the foreclosure sale, (21 the foreclosure notices failed to identify the “holder” of the mortgage, and ( 3 ) the notices were deficient under Mass. Gen. L. ch. 244, 5 14. [A592-93]. Put another way, the Land Court held that Appellants lacked authority as assignees to conduct the subject: foreclosures.

Naked Capitalism on what this ruling means:

This is the key sentence from the decision, that the use of a securitization does not alter or reduce the requirements that apply to transfers and ownership of the loans and the related property.

The Games Banks Play

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The economic bloggers of the world are digging into Wells Fargo's books, and they are finding a very foul odor.

#1) Market-ticker posted this little item, with the supporting document, that should make for interesting reading.

This borrower couldn't pay and thus stopped doing so. This should generate a "NOD" (Notice of Default) and ultimately lead to foreclosure, right? It should result in an impaired asset which might be sold to some other company (at a discount), right?
It got sold all right - right at the "120 day" late point where Wells counts a loan as "defaulted."
But look at who it got sold to.....
Yes, Wells bought the loan from.... itself?
Yep.

It's a classic shell game. Wells Fargo can avoid generating a NOD and go to foreclosure and thus book losses, but the losses are still real.

WFB may need $50 Billion

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It was only a couple days ago the stock market shot up after Wells Fargo announced $3 Billion in profits. It was such good news it seemed too good to be true.

Now, just a few days later, the news was indeed too good to be true.

KBW expects $120 billion of “stress” losses at Wells Fargo, assuming the recession continues through the first quarter of 2010 and unemployment reaches 12 percent, Cannon wrote today in a report. The San Francisco-based bank may need to raise $25 billion on top of the $25 billion it owes the U.S. Treasury for the industry bailout plan, he wrote.
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BoA, Wells Fargo, TARP Recipients, Forcing U.S. Workers to Train their Foreign Guest Worker Replacements Before Being Fired

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Wells Fargo, a TARP recipient who bought Wachovia, is now forcing U.S. workers to train their foreign guest worker replacements before being fired. So is Bank of America.

Are you thinking wait a second, weren't those banks given billions and billions in U.S. taxpayer dollars? Aren't they supposed to first consider U.S. workers for jobs in the United States? Weren't Bank of America and Wells Fargo made H-1B and L-1 guest worker dependent employers by legislation recently passed by Congress?

If you havn't read Institutional Risk Analyst yet, you need to NOW

Last week ago, Institutional Risk Analytics interviewed Josh Rosner of Graham Fisher & Co and David Kotok of Cumberland Advisors, and the discussion is one of the most direct and revealing of the true political nature of the financial collapse I have yet seen. As I have written before, using reports from the Fed, FDIC, and Comptroller of the Currency, the financial problems are very tightly concentrated in a handful of the largest banks, with over 8,000 plus smaller and regional banks having declined to participate in Wall Street’s derivatives madness.