Certified Forensic Loan Auditors, LLC

 
  Upcoming Classes

Search CFLA's Article Archive:

Wells Fargo Settlement Reveals Just How Aggressive the Bank Was in Making Shoddy Mortgages in Run‐Up to Financial Crisis

by Steve Goldstein | August 1, 2018

Wells Fargo is paying over $2 billion to resolve a lawsuit over the faulty mortgages it sold to investors.
(Photo Credit: Getty Images)

It's tough to be surprised by any finding about deception in the run-up to the 2008‐09 financial crisis.

But in announcing a $2.09 billion settlement with Wells Fargo on Wednesday, the Justice Department did demonstrate once again just how aggressive banks were in their mortgage practices.

Per the settlement, Wells Fargo wanted to double production of subprime and Alt‐A loans from 2005 to 2006, because its market share in loan origination was falling. And it didn't want to be too fussy. So it took a number of steps to encourage its underwriters to be more aggressive while processing loans, including adding new compensation categories.

One way was from what are called "stated income" programs, where a loan would be approved based on unverified financial statements by prospective borrowers.

Between August 2005 and October 2007, Wells Fargo tested 1,211 loans in two programs. Most of these loans applications — more than 70% — had at least a 20% discrepancy between the borrower's stated income and the income information reflected in the borrower's most recent tax returns as filed with the IRS. In fact, the average variance was approximately 65%.

Per the Justice Department, the results were widely distributed among Wells Fargo employees, who promptly did nothing about it. One manager asked his supervisor about risks related to "knowing the results but not taking action," the Justice Department said.

What got Wells Fargo into trouble was that at least 73,529 of these stated‐income loans were sold as components of residential-mortgage‐backed securities. Nearly half of those loans have defaulted.

In a statement, the bank pointed out the conduct being penalized was not recent. "We are pleased to put behind us these legacy issues regarding claims related to residential‐mortgage‐backed securities activities that occurred more than a decade ago," said Wells Fargo CEO Tim Sloan in a statement. The bank said the amount of the settlement was fully accrued as of June 30.

 

 

Order Cutting-Edge Services Now   Quiet Title Packages from Licensed Attorneys
     
CFLA Sponsored Attorney Links   CFLA Training Academy

 

 

Back to August 2018 Archive

 

"CFLA was founded by the Nation's Leading Foreclosure Defense Attorneys back in 2007 to serve the Foreclosure Defense Industry and fight pervasive Bank Fraud. Since opening our virtual doors, CFLA has rapidly expanded to become the premier online legal destination for small businesses and consumers. But as the company continues to grow, we're careful to hold true to our original vision. For us, putting the law within reach of millions of people is more than just a novel idea–it's the founding principle, just ask Andrew P. Lehman, J.D.. With convenient locations in Houston and Los Angeles, you can contact Our National Account Specialist and General Manager / Member Damion W. Emholtz at 888-758-CFLA (2352) for a free Mortgage Fraud Analysis or to obtain samples of work product, including cutting edge Bloomberg Securitization Audits, Litigation Support, Quiet Title Packages, and for more information about our Nationally Accredited and U.S. Department of Education Approved "Mortgage Securitization Analyst Training Certification" Classes (3 days) 24 hours for approved CLE & MCLE Credit (Now Available Online)".

SEE BELOW- http://www.certifiedforensicloanauditors.com

Call us at 888-758-CFLA (2352)

Bookmark and Share
spacer
Facebook Like us on Facebook
Twitter Follow us on Twitter
YouTube View our YouTube Videos
LinkedIn Connect to us on Linkedin
 
BBB Logo

 

spacer

Contact us or view our Sample Documents & Audits by completing the form below.

  • Reload
  • Should be Empty:

 

DVD Sets Only $99

 

FREE Mortgage Fraud Analysis

 

Order Cutting-Edge Services Now

 

Quiet Title Packages from Licensed Attorneys

 

Affiliate Services

 

CFLA Sponsored Attorney Links

 

Take-Home Education Package

 

Advocate Legal

 

The True News Network

 

Rubenstein Business Law

 

Atighechi Law Group

 

Scunziano & Associates

 

Foreclosure Defense LLC

 

Get Certified to Perform Mortgage Securitization Audits

 

CFLA Training Academy

 

Expert Witness Services

 

Cutting Edge Expert Securitization Reports

 

CFLA Credit Cards

 

Breaking News

 

Letters to the Editor

 

CFLA Weekly Newsletters

 

Code of Ethics

 

Testimonials

 

Instructional Videos

 

Job Opportunities

 

License Opportunities

 

MARS Rule

 

Product Samples

 

Resource Links

 

Servicer Information

 

Foreclosure Laws

 

REST Report

 

Quiet Title Packages from Licensed Attorneys

 

Advertise on CFLA

 

Advertising Space: Mortgage Securitization, Quiet Title

 

Certified Forensic Loan Auditors, LLC
13101 West Washington Blvd.
Suite 444
Los Angeles, CA 90066

Phone: 888-758-CFLA (2352)
Mobile Users: CLICK TO CALL
info@certifiedforensicloanauditors.com

   
 
CFLA IS NOT A LAW FIRM AND DOES NOT PROVIDE ANY LEGAL ADVICE. CFLA DOES NOT OFFER FORECLOSURE CONSULTING OR FORECLOSURE RELIEF
SERVICES. CFLA DOES NOT OFFER OR ASSIST WITH ANY LOAN MODIFICATION SERVICE. CFLA ALWAYS RECOMMENDS THAT CLIENTS RETAIN COMPETENT COUNSEL IN THEIR RESPECTIVE JURISDICTION. CFLA HAS A FREE PROGRAM TO REFER CFLA CLIENTS TO LAW FIRMS IN NEARLY EVERY STATE AND CFLA
DOES NOT CHARGE OR OBTAIN REFERRALS FEES FOR THESE SERVICES. SERVICES NOT OFFERED TO RESIDENTS OF THE STATE OF NEVADA.

 
Home About Us Privacy Policy Terms of Service Disclaimer SERVICES Careers Contact Us
 
COPYRIGHT © 2007-2017 Certified Forensic Loan Auditors ™ All rights reserved