Wells Fargo Settles Fraud Claims with Government

The New York Times today reports that Wells Fargo has settled claims that it defrauded the government by processing mortgage loans for certain low income individuals whom Wells knew did not qualify for particular programs and then failing to advise the government that these people did not qualify. When the borrowers defaulted and the mortgages failed, Wells Fargo then demanded that the government reimburse it under these programs. The Times further notes that Wells is the last of the big banks to settle these types of claims with the government. Wells will have to pay $1.2 Billion to settle. It is not clear if these funds will make their way into the programs to help homeowners save their homes.

The Complaint alleged Wells poorly trained it employees, failed to properly underwrite the loans and failed to advise the government when it discovered that certain borrowers were ineligible for the program. Although 1.2 Billion is a large sum, it is miniscule when compare with the chaos which Wells and the other big banks caused the entire world economy and the terrible suffering of millions of Americans caught up in the financial disaster who faced foreclosure on their homes. The article makes no mention of jail time for any of the Wells executives.

If you are still struggling with mortgage debt, please feel free to contact us to speak about a mortgage modification or a possible Chapter 13 Bankruptcy to try to get some relief. To see the full article follow this link: NY Times-Wells to Pay 1.2 Billion