Hand slap for Wells Fargo

Since we’re never going to see the criminal indictments these weasels deserve, would it be too much, in light of current developments, that the president and other administration officials stop throwing in little digs at homeowners for their miniscule role in the massive and systemic mortgage fraud that crashed the economy? I can’t tell you how that makes my blood boil in light on the ongoing rape and pillaging of those unfortunate enough to be holding mortgages with these bastards:

Oct. 9 (Bloomberg) — Wells Fargo & Co. was sued by the U.S., which alleged the bank made reckless mortgage loans that defaulted and forced the federal government to pay hundreds of millions of dollars in insurance claims.

The government seeks damages and civil penalties under the False Claims Act and the Financial Institutions Reform, Recovery and Enforcement Act of 1989 for alleged misconduct spanning more than a decade related to the bank’s participation in a Federal Housing Administration program, U.S. Attorney Preet Bharara in Manhattan said in a statement. The complaint was filed today in New York federal court.

“As the complaint alleges, yet another major bank has engaged in a longstanding and reckless trifecta of deficient training, deficient underwriting and deficient disclosure, all while relying on the convenient backstop of government insurance,” Bharara said in the statement.

The suit undermines San Francisco-based Wells Fargo’s reputation as a lender that avoided some of the industry’s worst underwriting practices and threatens to compound the bank’s costs as the government completes probes of the housing bubble’s collapse.

Where does the Post get such lousy, lazy reporters? Just a few months ago (see video), Wells was fined $175 million for steering qualified minority buyers to subprime mortgages. And in 2008, a Louisiana bankruptcy court hit Wells with $3.1 million in punitive damages – for one bad loan. As Yves Smith wrote then:

Wells, as we have pointed out repeatedly, has an annoying habit of piously claiming it is better than other servicers when it engages in the same indefensible conduct as its peers. So if you were to take Wells at its word, the conduct of other servicers is at least as bad as what has taken place in this jurisdiction, if not worse. Remember, servicers are highly routinized operations, so if something, it is almost certain to be standard practice. And Wells has admitted that in this case.

[…] The latest example of Wells bad behavior in Magner’s courtroom that has come to a resolution of sorts is another case of Wells overcharging a borrower. In this suit, Jones v. Wells Fargo, filed in 2007, involved a borrower having to sue Wells to recoup overcharges by Wells plus actual damages, plus a request for punitive damages. The ruling sets forth the sorry history in some detail and I strongly suggest you read it in full.

[…] The word “predatory” is not adequate to describe Wells’ conduct. The bank is not simply willing to steal from consumers, via blatant, institutionalized violations of its own agreements on mortgages and later on bankruptcy plans. It has absolutely no respect for the law, whether it be contracts or court procedures. It’s a band of marauders that our society treats as legitimate because the perpetrators wear suits and can afford to hire lobbyists. And the Federal government and state attorneys general are certain to have emboldened Wells and its brethren by rewarding them rather than treating them like the criminals they are.


In Re Jones

One thought on “Hand slap for Wells Fargo

  1. Capitalism by its very nature is predatory. The 1% can’t possibly have 40% of the wealth unless they steal it from the 99%. Unless and until “we the people” demand that a new economic system be put in place this nonsense will continue to happen decade after decade.

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