Say it isn’t so…Wells Fargo the bank who brought us “Ghetto Loans” for “Mud People” is in trouble for unfairly targeting minorities?

No, I’m not making this up.  Read below.

- The Bank Slayer

Justice Dept. presses Wells Fargo on loans-source

* Justice eyes Wells for targeting Afro-Americans – source

* Subprime loans focus of settlement talks – source

* Justice, Wells decline comment

NEW YORK, July 27 (Reuters) – Wells Fargo & Co (WFC.N) and the U.S. Department of Justice are negotiating to settle allegations that the bank illegally targeted African-Americans for expensive subprime loans, according to a source familiar with the matter.

The source, who declined to be identified because the talks were not public, said the bank was talking with lawyers from the department’s civil rights division.

The case is separate from other government investigations of banks over mortgages, including a pending joint action by state attorneys general and another section of the Justice Department over foreclosure practices, such as robo-signing of documents for court cases.

The talks follow Wells Fargo’s agreement last week to pay an $85 million civil penalty to the Federal Reserve Board over allegations that it steered borrowers into costly subprime mortgages and falsified their financial qualifications. [ID:nN1E76J1IZ]

The Justice Department investigation was reported earlier by the Huffington Post. huff.to/n5Z68j

The Justice Department declined to comment. Wells Fargo spokeswoman Vickee Adams declined to comment on the civil rights case. She said the Federal Reserve case did not include allegations involving ethnic minorities.

The bank continues to fight lawsuits brought by the cities of Baltimore and Memphis charging that the bank hurt them with subprime loans, Adams said. (Reporting by David Henry; editing by John Wallace)

SHOCKER, not everyone in foreclosure “bought too much house” or “lied about their income on the loan application”.

It turns out, that at times, Wells Fargo  falsified records and changed borrowers loan applications or steered them into sub-prime profitable loans.

“The order requires Wells Fargo to compensate borrowers affected by these practices.”

To identify Wells Fargo Financial borrowers whose income information was falsified without their knowledge, Wells Fargo is required to set up a procedure for potentially affected borrowers to show that their actual income at the time did not qualify them for the loans they were granted. Wells Fargo is required to provide notice of this procedure to all borrowers who obtained cash-out refinancing loans between January 2004 and June 2008

Thanks to 4closurefraud.org for the article.

- The Bank Slayer

Wells Fargo Home Mortgage

Federal Reserve Orders $85M Civil Penalty Against Wells Fargo for Steering Potential Prime Borrowers Into More Costly Subprime Loans and Falsifying Income

The following is an announcement by the Federal Reserve Wednesday regarding a civil penalty against Wells Fargo:

The Federal Reserve Board on Wednesday issued a consent cease and desist order and assessed an $85 million civil money penalty against Wells Fargo & Company of San Francisco, a registered bank holding company, and Wells Fargo Financial, Inc., of Des Moines. The order addresses allegations that Wells Fargo Financial employees steered potential prime borrowers into more costly subprime loans and separately falsified income information in mortgage applications. In addition to the civil money penalty, the order requires that Wells Fargo compensate affected borrowers.

The $85 million civil money penalty is the largest the Board has assessed in a consumer-protection enforcement action and is the first formal enforcement action taken by a federal bank regulatory agency to address alleged steering of borrowers into high-cost, subprime loans.

Wells Fargo Financial–a once-active, non-bank subsidiary of Wells Fargo–made subprime loans that primarily refinanced existing home mortgages in which borrowers received additional money from the loan proceeds in so-called cash-out refinancing loans. The order addresses allegations that Wells Fargo Financial sales personnel steered borrowers who were potentially eligible for prime interest rate loans into loans at higher, subprime interest rates, resulting in greater costs to borrowers. The order also addresses separate allegations that Wells Fargo Financial sales personnel falsified information about borrowers incomes to make it appear that the borrowers qualified for loans when they would not have qualified based on their actual incomes.

These practices were allegedly fostered by Wells Fargo Financials incentive compensation and sales quota programs and the lack of adequate controls to manage the risks resulting from these programs. These deficiencies allegedly constitute unsafe and unsound banking practices and unfair or deceptive acts or practices that are prohibited by the Federal Trade Commission Act and similar state laws. In agreeing to the order, Wells Fargo did not admit any wrongdoing. The order requires Wells Fargo to compensate borrowers affected by these practices. To identify prime-eligible borrowers with cash-out refinancing loans who were subject to improper steering, Wells Fargo is required to reevaluate the qualifications of all borrowers who took out a subprime, cash-out refinancing loan between January 2006 and June 2008 to account for certain specific steering techniques. To identify Wells Fargo Financial borrowers whose income information was falsified without their knowledge, Wells Fargo is required to set up a procedure for potentially affected borrowers to show that their actual income at the time did not qualify them for the loans they were granted. Wells Fargo is required to provide notice of this procedure to all borrowers who obtained cash-out refinancing loans between January 2004 and June 2008 at a Wells Fargo Financial office where there is evidence that sales personnel at that office altered or falsified borrowers income information.

These compensation plans must be approved by the Federal Reserve. An independent, third-party administrator will review determinations about the eligibility of individual borrowers for compensation and the amounts of compensation provided. The Federal Reserve will also monitor compliance with the approved plans. Failure to comply with the plans will constitute a breach of the cease and desist order.

The amount of compensation provided to individual borrowers will depend on a number of factors, including differences between what borrowers paid and what they should have paid in terms of origination points, interest payments, fees, and penalties. Until specific determinations of harm to individual borrowers are made, it is difficult to determine the total amount of compensation provided to borrowers. Based on preliminary estimates, the amount of compensation that each eligible borrower will receive ranges between $1,000 and $20,000, but some eligible borrowers may receive less than $1,000 and others may receive more than $20,000. The number of borrowers who may receive compensation under both plans is estimated to be between 3,700 and possibly more than 10,000.

Further information for borrowers may be found at www.wellsfargo.com/mortgage.

In addition to the monetary components of the settlement, Wells Fargo is required to improve oversight of its anti-fraud and compliance programs and incentive compensation and performance management policies for personnel who sell and underwrite home mortgage loans. The Board
also has issued consent orders against 16 former Wells Fargo Financial sales personnel prohibiting them from becoming employed in the banking industry. The Board has also issued a consent cease and desist order against another former Wells Fargo Financial sales person prohibiting future improper conduct.

Bank of America, Chase, Wells Fargo, Citigroup and Ally Financial (GMAC) have been (and still are) cheating taxpayers by wrongfully foreclosing and then claiming millions of dollars in reimbursements from HUD, FHA & other governmental bodies for losses on mortgage loans.

Why won’t you let the dog sniff your locker?

As the article below shows, these banksters resist all attempts to uncover the truth about what is really going on behind the curtain – instead offering up billions to sweep the problems under the rug.  Doesn’t that just smell wrong?  Why would anyone offer BILLIONS to just look the other way if you hadn’t done anything wrong?

This just affects the deadbeats who don’t pay their mortgage, right?

A frequent comment we hear is, “Hey those deadbeats that can’t pay their mortgage deserve to be foreclosed.”  Yes, some folks are deadbeats or what we call predatory borrowers but most are not.  Most folks have had life hit them in the mouth and are just looking for some relief.   Many are not looking for a handout and are willing to sell their home and walkaway.

Almost every month we have a family walk into our office, who is CURRENT and not in default but their mortgage account is jacked up.  For instance, they paid their property taxes but the bank paid them as well (erroneously) and now won’t accept their regular mortgage payment unless they also send them money for the mis-paid taxes.   Or how about the military families that were foreclosed while they were deployed overseas – in direct violation of the law.

The article below from the Huffington Post points out the consistent, rampant and willful way in which these large banks enrich themselves not just the expense of the deadbeat or the honest law abiding borrower whose account is jacked up but every tax paying citizen in America.

Whether or not you or someone who you know is struggling with their mortgage situation, the shameful acts of some of the largest banking institutions in America needs to stop.  We all suffer.

- The Bank Slayer

Confidential Federal Audits Accuse Five Biggest Mortgage Firms Of Defrauding Taxpayers

http://www.huffingtonpost.com/2011/05/16/foreclosure-fraud-audit-false-claims-act_n_862686.html

WASHINGTON — A set of confidential federal audits accuse the nation’s five largest mortgage companies of defrauding taxpayers in their handling of foreclosures on homes purchased with government-backed loans, four officials briefed on the findings told The Huffington Post.

The five separate investigations were conducted by the Department of Housing and Urban Development’s inspector general and examined Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial, the sources said.

The audits accuse the five major lenders of violating the False Claims Act, a Civil War-era law crafted as a weapon against firms that swindle the government. The audits were completed between February and March, the sources said. The internal watchdog office at HUD referred its findings to the Department of Justice, which must now decide whether to file charges.

The federal audits mark the latest fallout from the national foreclosure crisis that followed the end of a long-running housing bubble. Amid reports last year that many large lenders improperly accelerated foreclosure proceedings by failing to amass required paperwork, the federal agencies launched their own probes.

The resulting reports read like veritable indictments of major lenders, the sources said. State officials are now wielding the documents as leverage in their ongoing talks with mortgage companies aimed at forcing the firms to agree to pay fines to resolve allegations of routine violations in their handling of foreclosures.

The audits conclude that the banks effectively cheated taxpayers by presenting the Federal Housing Administration with false claims: They filed for federal reimbursement on foreclosed homes that sold for less than the outstanding loan balance using defective and faulty documents.

Two of the firms, including Bank of America, refused to cooperate with the investigations, according to the sources. The audit on Bank of America finds that the company — the nation’s largest handler of home loans — failed to correct faulty foreclosure practices even after imposing a moratorium that lifted last October. Back then, the bank said it was resuming foreclosures, having satisfied itself that prior problems had been solved.

According to the sources, the Wells Fargo investigation concludes that senior managers at the firm, the fourth-largest American bank by assets, broke civil laws. HUD’s inspector general interviewed a pair of South Carolina public notaries who improperly signed off on foreclosure filings for Wells, the sources said.

The investigations dovetail with separate probes by state and federal agencies, who also have examined foreclosure filings and flawed mortgage practices amid widespread reports that major mortgage firms improperly initiated foreclosure proceedings on an unknown number of American homeowners.

The FHA, whose defaulted loans the inspector general probed, last May began scrutinizing whether mortgage firms properly treated troubled borrowers who fell behind on payments or whose homes were seized on loans insured by the agency.

A unit of the Justice Department is examining faulty court filings in bankruptcy proceedings. Several states, including Illinois, are combing through foreclosure filings to gauge the extent of so-called “robo-signing” and other defective practices, including illegal home repossessions.

Representatives of HUD and its inspector general declined to comment.

The internal audits have armed state officials with a powerful new weapon as they seek to extract what they describe as punitive fines from lawbreaking mortgage companies.

A coalition of attorneys general from all 50 states and state bank supervisors have joined HUD, the Treasury Department, the Justice Department and the Federal Trade Commission in talks with the five largest mortgage servicers to settle allegations of illegal foreclosures and other shoddy practices.

Such processes “have potentially infected millions of foreclosures,” Federal Deposit Insurance Corporation Chairman Sheila Bair told a Senate panel on Thursday.

The five giant mortgage servicers, which collectively handle about three of every five home loans, offered during a contentious round of negotiations last Tuesday to pay $5 billion to set up a fund to help distressed borrowers and settle the allegations.

That offer — also floated by the Office of the Comptroller of the Currency in February — was deemed much too low by state and federal officials. Associate U.S. Attorney General Tom Perrelli, who has been leading the talks, last week threatened to show the banks the confidential audits so the firms knew the government side was not “playing around,” one official involved in the negotiations said. He ultimately did not follow through, persuaded that the reports ought to remain confidential, sources said. Through a spokeswoman, Perrelli declined to comment.

Most of the targeted banks have not seen the audits, a federal official said, though they are generally aware of the findings.

Some agencies involved in the talks are calling for the five banks to shell out as much as $30 billion, with even more costs to be incurred for improving their internal operations and modifying troubled borrowers’ home loans.

But even that number would fall short of legitimate compensation for the bank’s harmful practices, reckons the nascent federal Bureau of Consumer Financial Protection. By taking shortcuts in processing troubled borrowers’ home loans, the nation’s five largest mortgage firms have directly saved themselves more than $20 billion since the housing crisis began in 2007, according to a confidential presentation prepared for state attorneys general by the agency and obtained by The Huffington Post in March. Those pushing for a larger package of fines argue that the foreclosure crisis has spawned broader — and more costly — social ills, from the dislocation of American families to the continued plunge in home prices, effectively wiping out household savings.

The Justice Department is now contemplating whether to use the HUD audits as a basis for civil and criminal enforcement actions, the sources said. The False Claims Act allows the government to recover damages worth three times the actual harm plus additional penalties.

Justice officials will soon meet with the largest servicers and walk them through the allegations and potential liability each of them face, the sources said.

Earlier this month, Justice cited findings from HUD investigations in a lawsuit it filed against Deutsche Bank AG, one of the world’s 10 biggest banks by assets, for at least $1 billion for defrauding taxpayers by “repeatedly” lying to FHA in securing taxpayer-backed insurance for thousands of shoddy mortgages.

In March, HUD’s inspector general found that more than 49 percent of loans underwritten by FHA-approved lenders in a sample did not conform to the agency’s requirements.

Last October, HUD Secretary Shaun Donovan said his investigators found that numerous mortgage firms broke the agency’s rules when dealing with delinquent borrowers. He declined to be specific.

The agency’s review later expanded to flawed foreclosure practices. FHA, a unit of HUD, could still take administrative action against those firms for breaking FHA rules based on its own probe.

The confidential findings appear to bolster state and federal officials in their talks with the targeted banks. The knowledge that they may face False Claims Act suits, in addition to state actions based on a multitude of claims like fraud on local courts and consumer violations, will likely compel the banks to offer the government more money to resolve everything.

But even that may not be enough.

Attorneys general in numerous states, armed with what they portray as incontrovertible evidence of mass robo-signings from preliminary investigations, are probing mortgage practices more closely.

The state of Illinois has begun examining potentially-fraudulent court filings, looking at the role played by a unit of Lender Processing Services. Nevada and Arizona already launched lawsuits against Bank of America. California is keen on launching its own suits, people familiar with the matter say. Delaware sent Mortgage Electronic Registration Systems Inc., which runs an electronic registry of mortgages, a subpoena demanding answers to 75 questions. And New York’s top law enforcer, Eric Schneiderman, wants to conduct a complete investigation into all facets of mortgage banking, from fraudulent lending to defective securitization practices to faulty foreclosure documents and illegal home seizures.

A review of about 2,800 loans that experienced foreclosure last year serviced by the nation’s 14 largest mortgage firms found that at least two of them illegally foreclosed on the homes of “almost 50″ active-duty military service members, a violation of federal law, according to a report this month from the Government Accountability Office.

Those violations are likely only a small fraction of the number committed by home loan companies, experts say, citing the small sample examined by regulators.

In an April report on flawed mortgage servicing practices, federal bank supervisors said they “could not provide a reliable estimate of the number of foreclosures that should not have proceeded.”

The review of just 2,800 home loans in foreclosure compares with nearly 2.9 million homes that received a foreclosure filing last year, according to RealtyTrac, a California-based data provider.

“The extent of the loss cannot be determined until there is a comprehensive review of the loan files and documentation of the process dealing with problem loans,” Bair said last week, warning of damages that could take “years to materialize.”

Home prices have fallen over the past year, reversing gains made early in the economic recovery, according to data providers Zillow.com and CoreLogic. Sales of new homes remain depressed, according to the Commerce Department. More than a quarter of homeowners with a mortgage owe more on that debt than their home is worth, according to Zillow.com. And more than 2 million homes are in foreclosure, according to Lender Processing Services.

Rather than punishing banks for misdeeds, the administration is now focused on helping troubled borrowers in the hope that it will stanch the flood of foreclosures and increase consumer confidence, officials involved in the negotiations said.

Levying penalties can’t accomplish that goal, an official involved in the foreclosure probe talks argued last week.

For their part, however, state officials want to levy fines, according to a confidential term sheet reviewed last week by HuffPost. Each state would then use the money as it desires, be it for facilitating short sales, reducing mortgage principal, or using the funds to help defaulted borrowers move from their homes into rentals.

In a report last week, analysts at Moody’s Investors Service predicted that while the losses incurred by the banks will be “sizable,” the credit rating agency does “not expect them to meaningfully impact capital.”

************************* Shahien Nasiripour is a senior business reporter for The Huffington Post.

Strange but true…bank AND attorney fraud.   No surprise either that AHMSI is named!

It’s bizarre but, it turns out, Wall Street cut corners when it created those mortgage-backed investments that triggered the financial collapse. Now that banks want to evict people, they’re unwinding these exotic investments to find, that often, the legal documents behind the mortgages aren’t there. Caught in a jam of their own making, some companies appear to be resorting to forgery and phony paperwork to throw people – down on their luck – out of their homes.

Names such as:
Akerman Senterfitt & Eidson, P.A. , American Home Mortgage Servicing, Docx, LLC, Florida Default Law Group, Law Offices of David Stern, Law Offices of Marshall Watson, Lender Processing Services, Inc., Shapiro & Fishman Law Firm

Action Date: April 4, 2011
Location: West Palm Beach, FL

On April 3, 2011, CBS’ 60 MINUTES aired a segment showing massive fraud by banks and mortgage-backed trusts in foreclosures. The segment focused on one particular document mill, Docx, LLC, owned by Lender Processing Services, Inc., a company that works for over 51 banks. One former employee confessed to forging 4,000 documents each day.

What mortgage servicing companies used the Docx forged documents in hundreds of thousands of cases?

The major mortgage servicer involved was American Home Mortgage Servicing, Inc. in Coppell, TX. Other mortgage servicers that used forged documents from LPS include Saxon Mortgage Services in Fort Worth, TX and Select Portfolio Servicing in Salt Lake city, Utah.

What bank/trustees most often used the Docx forged documents in foreclosures?

Deutsche Bank National Trust Company, U.S. Bank, Wells Fargo, Citibank and Bank of America were the top five users of these forged documents, but other banks were also involved.

American Home Mortgage Servicing, Inc. knew about the forgeries, but never disclosed to courts or homeowners their widespread use of forged documents.

In thousands of cases across the country, Deutsche Bank National Trust Company continues to push these documents upon the courts as proof that they own mortgages and have the right to foreclose, despite overwhelming evidence and even admissions of forgeries.

These servicing companies and bank need to begin the process of admissions, disclosures and reparations.

What law firms pushed and continue to push these fraudulent documents upon Courts and homeowners?

In Florida, the firms that used these documents and continue to use these documents are: Law Offices of David Stern; Florida Default Law Group; Law Offices of Marshall Watson; Shapiro & Fishman Law Firm and Akerman, Senterfitt & Eidson, P.A. Lawyers who used and continue to use these Docx forgeries in court should, at a minimum, lose the right to practice law.

The government focus must be on protecting the rights of homeowners and shareholders and the court system and holding the banks and securities companies accountable.

60 Minutes – Lender Fraud

Flagstar Bank, GMAC, PNC Bank, SunTrust Bank, U.S. Bank and Wells Fargo must be “special” as they apparently don’t think they need to show up to court.

Miami-Dade Circuit Judge Jennifer Bailey was hopping mad at the lack of respect shown her court by these banks.   She warned, “You may be held in jail up to 48 hours before a hearing is held.”

Granted scheduling accidents can occur.  Maybe one party doesn’t get proper notice or somehow misses the hearing but Bank of America showed up as did the property association rep.

On the heels of the Massachusetts Supreme Court case that whacked Wells Fargo for failing to follow proper procedure, you would think that banks would be on the ir best behavior but apparently not.  Enjoy the read from the Daily Business Review below.

- The Bank Slayer

Judge holds bankers in contempt, threatens jail

Jose Pagliery

Daily Business Review

January 13, 2011

Jennifer Bailey

Representatives from six major banks that skipped a hearing in a Miami condo association receivership case could face the wrath of Miami-Dade Circuit Judge Jennifer Bailey today if they fail to show up a second time.

The judge already has declared lenders that own or are foreclosing on units at Bird Grove Condo are on the hook for $105,999 in expenses for the court-appointed receiver for the association. She also held the six in contempt of court.

Bailey last month granted a request by the receiver, Miami attorney Lisa Lehner, to be paid for pulling the building — an asset for the foreclosing banks — back from the brink of condemnation.

When Lehner was appointed in March, garbage hadn’t been collected for weeks, electricity was about to be cut off, the building had no insurance, and an elevator was broken. She turned it around in months.

“They have property and collateral that if I walk away from turn into nothing,” Lehner said. “Here I am, sitting as their property manager, working for free after practicing law for 28 years. It’s just not fair.”

Lehner’s demand for $5,579 in expenses per unit went uncontested at a Dec. 1 show cause hearing where Bank of America was the only lender to send a representative. Missing were Flagstar Bank, GMAC, PNC Bank, SunTrust Bank, U.S. Bank and Wells Fargo.

In November, banks owned two units and were foreclosing on another 17 units in the 39-unit building at 2734 Bird Ave. between a gas station and a gallery. A one-bedroom, one-bath unit is listed for sale for $50,000. Bank of America filed nine foreclosure cases, followed by GMAC with five.

The six lenders were ordered to send non-attorney representatives to today’s hearing, when Bailey will discuss whether the banks also should be required to pay the receiver’s upcoming maintenance fees. Bailey’s order threatened to have bankers arrested if they didn’t show, and she warned, “You may be held in jail up to 48 hours before a hearing is held.”

Lawyers for the six banks did not return calls for comment before deadline. They include Hollywood’s David G. Cornell with Ben-Ezra & Katz, Weston’s Elsa Hernandez Shum with the Law Offices of David J. Stern and Tampa attorney Erik DeL’Etoile with Florida Default Law Group.

It’s possible future expenses may not be billed by Lehner, who plans to step down from the post.

“I’m withdrawing. It’s their property. They’re going to have to figure out what to do with it if they want to save it,” she said. “I certainly was prepared to not be paid for a long time.” But, she said, she did not think she would be spending 11 months without pay.

Justifying Fees

Lehner’s dilemma is similar to many cases involving foreclosing banks and troubled homeowner or condo associations, in which a judge appointed a receiver at the request of the association. But in this instance, the association was almost broke; in March, it had only $6,316 left to operate a building that Lehner estimates costs $10,000 a month to maintain.

The association counted more than $143,000 in accounts receivable, “all of which clearly presented a serious cash-flow problem,” Lehner wrote in a July 30 motion.

She would be working for free for an undetermined period of time even though associations typically pay for receiverships.

Demanded Expenses

After spending months ordering repairs, collecting association fees and paying the building’s overdue bills, Lehner demanded her expenses, arguing banks were getting a free ride.

Bailey asked her to distinguish her case from a 3rd District Court of Appeal decision in 2009, which determined lenders in the process of foreclosure aren’t responsible for unpaid association fees until they take title, regardless of how long they delay final judgment.

Lehner’s attorney, Lipscomb Eisenberg partner Deborah Baker, cited a 1911 Florida Supreme Court decision, a 1959 legal treatise and a 1992 opinion from the 11th U.S. Circuit Court of Appeals.

That was enough to convince Bailey, who congratulated Lehner and Baker for their work in court on Nov. 1.

“In all candor, the efforts of the receiver and her attorney have been nothing short of heroic in connection with this building,” the judge said.

“No doubt,” responded Bank of America’s representative, Akerman Senterfitt shareholder Jeff Trinz.

Trinz was the only representative to appear at the show cause hearing the next month.

Lehner and Baker also credited Trinz as being the only bank representative to cooperate with them.

Association Law Group partner David C. Arnold, a North Bay Village attorney who represents condo associations and is not involved in the Miami case, has his doubts about Bailey’s ruling.

“How they would hold the banks liable for the receiver, I think, is a stretch. I don’t think it’s going to hold up. It’s innovative thinking, but I just don’t see how the 3rd DCA’s going to affirm any type of action like that,” he said.

State laws governing condo associations ensure common expenses are assessed against unit owners, not the banks holding mortgages, he said.

Undercutting the receiver’s arguments is the fact that efforts to save the building might not benefit the banks, Arnold said.

“They don’t have to foreclose at all. A lot of them just walk away and give up their mortgages,” he said.

The way Lehner described lenders’ attitudes in her case could point to that end game.

“Most of the banks don’t seem to want to do anything about it,” she said. “Without any thought of any consequences, not to care about the human cost? All right, I get that. But not to care about their property? I just don’t get that.”

Jose Pagliery can be reached at (305) 347-6648.

AMAZING!  Anyone attempting a loan modification or short sale more than once with Wells Fargo can attest to “The Black Hole”.

The following article is from Neil Garfield’s website and is very revealing.  Wells Fargo as well as other large banks tend “lose” documents on a regular basis.

- The Bank Slayer

EDITOR’S COMMENT: LIVINGLIES HAS INDEPENDENTLY VERIFIED EVERY STATEMENT OF THIS WHISTLE-BLOWER. IT OPENS THE DOOR TO A WHISTLE-BLOWER LAWSUIT, A QUI TAM ACTION IN WHICH THE RELATER OR WHISTLE-BLOWER CAN RECEIVE HUNDREDS OF MILLIONS OF DOLLARS AS WILL THE LAWYERS. I’m sure that some smart people will follow up on this. The ramifications are huge.

AN INCREDIBLE, HONEST, REVEALING POST BY AN ANONYMOUS WELLS FARGO EMPLOYEE. WOW. THANK YOU.

Documents are destroyed in “The Black Hole.” The people you talk to when you are seeking a loan modification have no knowledge of it. Many of them are temps, lacking experience in loan processing. It never registers with most of them that something strange is going on. The Black Hole is kept completely isolated from Wells Fargo servicing staff. Even if they realize it exists, they have no idea of its location.

I think it unlikely The Black Hole is actually in Wells Fargo. They have to keep it separate from their own staff, and separation provides a layer of insulation from discovery in lawsuits. It’s likely a service provided by LPS. It’s curious that other servicers who are LPS clients have a public record of the same kinds of loan modification document disappearance. My best guess for the name of the LPS product (software) that does this is LPS HAMP Solutions.

Wells Fargo make a mistake?  Not possible.  They said they have reviewed all their foreclosure processes and everything is on the up and up.

It seems that robo-signing can lead to mistakes.  It seems that in a rush to foreclose some innocent folks are inadvertently snared in the foreclosure net.

The story below is another good example of not rushing to presume that every person that is posted for foreclosure is a deadbeat, non-paying, bought more than they can afford, loser.

Have people bought homes with no money down, yes.  Have folks bought more than they can afford, yes.

But not everyone.

The full AP article is below.

- The Bank Slayer

‘Mistaken foreclosures’ on rise

Homeowners’ lawsuits in several states allege they were victims.

By Michelle Conlin of The Associated Press

Christopher Marconi was in the shower when he heard a loud banging on his door. By the time he grabbed a towel and hustled to his front step, a U.S. marshal’s sedan was peeling out of his driveway. Nailed to Marconi’s front door was a foreclosure summons from Wells Fargo, naming him as a defendant. But the notice was for a house Marconi had never seen — on a mortgage he never had.

By now, you may have heard the stories of bank robo-signers powering through hundreds of foreclosure affidavits a day without verifying a single fact. But they were genuine defaulters. Now a new species of homeowner is getting pushed into foreclosure hell.

These homeowners paid their mortgages — or loan modifications — on time. Some even paid off their loans. Worse, those on the receiving end of a bad foreclosure claim tell similar stories of getting bounced from one bank official to the next with no resolution while the foreclosure process continues apace.

“This is the worst I’ve ever seen it,” says Ira Rheingold, an attorney and executive director of the National Association of Consumer Advocates. Homeowners in Florida, Nevada, Texas and Pennsylvania have filed lawsuits alleging that they were victims of mistaken foreclosure. In many of those cases, the bank went so far as to haul away belongings and change the locks on the wrong homes.

One such suit was filed in March by Pennsylvania homeowner Angela Iannelli. She was up to date on her payments when, she says, she arrived home in October 2009 to find that Bank of America had ransacked her belongings, cut off her utilities, poured anti-freeze down her drains, padlocked her doors and confiscated Luke, her pet parrot of 10 years. It took her six weeks to get the bank to clean up the house.

Iannelli’s lawyer says the parties are in the process of “mutually resolving the issues” and the lawsuit is “in the process of being discontinued.” Bank of America did not immediately respond to a request for comment on her case.

Although Fannie Mae, Freddie Mac and several other large lenders are claiming a Holiday Gift with their self imposed foreclosure freeze sadly it won’t help Texans one single bit!

This “gift” is nothing more than a shameless attempt at improving their poor public image.

Why won’t it help Texans?

Because although they will suspend foreclosures for the holiday season, roughly from Dec. 20 to Jan. 3, the next foreclosure sale date is January 4!!!!!!

A class action lawsuit filed by New York law firm Harwood Feffer alleges that Wells Fargo-owned mortgage servicer, America’s Servicing Company, induced distressed borrowers into defaulting on their payments supposedly in order to get a loan modification all the while accruing late fees and penalties.  READ:  Enriching themselves at borrower’s expense.

This isn’t the first time we’ve heard this and ASC is not the only servicer that tells homeowners to stop making payments so that they can get a loan mod.  But looking only at Wells Fargo it is easy to prove these tactics – and not just for loan mods but deed-in-lieu and short sales.

For example, on Tuesday this week, a negotiator at Wells Fargo  emailed us the following (concerning a short sale):

Please be advised the property must be 31 days delinquent at the time of closing…

Hmmm… this clearly indicates the borrower is being told by the owner of the mortgage debt (or the agent of that owner) to purposely default.

Wells Fargo admitted it made mistakes in roughly 55,000 foreclosure cases.  Surprise, surprise, surprise!

Wells announced Wednesday that it will quickly “fix” these issues and re-file the necessary documents by the middle of November.

Wells called the mistakes “technical“, and it says “it has no plans to halt the foreclosure process”.

Of course, they won’t stop the foreclosure process.  I mean why stop when you can plow ahead – right or wrong.

What exactly is a technical mistake?  Is that like the time I forgot to put a stamp of my payment and it came back?    Will you credit my payment as on time because of my technical mistake?   I doubt it.   But your “technical” mistake is not just a snafu.  It is a LIE!!!  Affidavits that state items like, “I have personal knowledge of this account and the balance owed.  I have personal knowledge that the owner of the debt is XYZ.”    Really?

Depositions of two Wells Fargo employees have called the company’s foreclosure practices into question. One employee said that she signed between 300-500 foreclosure documents a day, while another employee admitted to only verifying dates on the documents he signed daily.

The entire foreclosure application and judicial process is supposed to be built around substantiated facts.  Rolling into court, holding up a sworn affidavit which no one has read it, and declaring who owns the debt and the amount owed is just wrong.

We're coming for you!

It really gets me fired up when they say, “We don’t believe that there are instances in which the foreclosures would not have occurred otherwise,” Teri Schrettenbrunner, a Wells Fargo spokeswoman, said.

If this is so then why do we have people in our office facing foreclosure when they have MADE THEIR PAYMENTS!   Innocent as well as “guilty” people are being swept up in the rush to foreclose.  The facts need to be verified!

Why don’t we just lock people up because they appear so guilty that it is obvious that they deserve jail time.  What happened to due process?

- The Bank Slayer