Wells Fargo Has Retracted Statements That They Did Not Take Part in Robo-Signing Practices
Wells Fargo, along with Bank of America and JPMorgan Chase, currently hold about 30% of the industry’s deposits. Due to its more conservative approach to homeowner lending, the mortgage crisis that began in 2008 seemed to hurt Wells Fargo less than other major banks.
The mortgage robo-signing scandal first began to come to light in the spring of 2010. Even though the practice was first identified in 1999, which was reported by Nye Lavalle, the controversy did not become a full blown scandal until the fall of 2010 when news stories began to detail erroneous evictions and foreclosures. Banks began to respond by temporarily halting foreclosure proceedings in some states.
Now, the largest banks, including Bank of America, are lifting the moratorium on foreclosure proceedings. Both banks did a turnaround when they began to admit that their foreclosure processes were not as sound as they claimed that they were. Wells Fargo said on Wednesday, October 27th that they will correct and resubmit a number, up to 55,000, of improperly filed documents by mid-November. Internal investigations by Wells Fargo indicated that bank employees did not fully adhere to its mandated procedures during the final steps in its foreclosure processes. The bank also admitted that aspects of some notarization processes had not been properly followed, which could potentially cause more paperwork errors.
The bank’s officials said that they are correcting these files and, even though there may not be errors on some of the files, they are erring on the side of caution and resubmitting those approximately 55,000 documents in the 23 states which foreclosures require court approval. Even though these documents are being resubmitted, Wells Fargo officials still maintain that the underlying information in the mortgage loan files is correct. They also maintain that troubled homeowners were not foreclosed upon erroneously.
Unlike GMAC and Bank of America, Wells Fargo has no plans to temporarily freeze foreclosure sales. Unfortunately, since their retraction, Wells Fargo has further contributed to the robo-signing morass. Recently, Attorneys general in 50 states are implementing a thorough investigation into the industry’s practices. Also, several federal regulators and a White House task force are simultaneously reviewing this as well.
Large mortgage players are also resubmitting multiple-thousands of cases in much of the country. Bank of America will probably resubmit about 102,000 foreclosures. Also, Chase is looking at 115,000 files in 41 states. PNC Financial and GMAC are getting on the band-wagon to resubmit files that, in all probability, have erroneous paperwork as well.
The retraction by Wells Fargo has scared investors. Previously, before they admitted the potential problems, bank officials had reassured investors that their processes were sound. They dismissed concerns that they participated in “so-called” robo-signing, in which a lone employee would sign thousands of foreclosure and mortgage documents without first verifying their contents, as the law requires.
A deposition by Xee Moua, a Wells Fargo manager, indicated that she would sign up to 500 foreclosure documents a day without verifying accuracy. Oscar Suris, a Wells Fargo spokesman, refused to comment about her deposition answers.
