‘It goes beyond Wells Fargo’: Concerns grow over sales tactics in banking industry
Source: The Washington Post
By Jonnelle Marte and Renae Merle September 16 at 4:38 PM
For Oscar Garza, career success was measured one account at a time. The Chase personal banker said he had a month to persuade customers to open 40 checking or savings accounts and 15 credit cards. Meeting that goal would mean an extra $800, but failure could lead to his termination.
You either do this or youre out, Garza said.
The stakes were so high, Garza says, that his managers encouraged him to enter false income information or to accept questionable identification documents in order to speed approval for new accounts. Other times, he said, he would run a customers credit history without their permission to determine if they qualified for a credit card.
Such corner-cutting sales tactics and worse have become a new flash point in the debate over whether, eight years after the financial crisis, U.S. regulators are doing enough to hold Wall Street accountable for bad behavior.
-snip-
Read more: https://www.washingtonpost.com/business/economy/it-goes-beyond-wells-fargo-concerns-grow-over-sales-tactics-in-banking-industry/2016/09/16/d83bf4c0-7b73-11e6-beac-57a4a412e93a_story.html?wpisrc=al_alert-economy
dixiegrrrrl
(60,010 posts)1. This sounds so much like the mortgage scam that led to the 2008 disaster
2. And, as we found with the mortgage scam, ( and now the auto loan and college tuition scams) this is not gonna be limited to just one bad actor.
Originally in the first stages of the mortgage meltdown, it was "only the sub-prime mortgages" and the finger was pointed only at Countrywide.
Then, rather slowly at first, it was revealed that "some" other lenders were involved.
Which turned out to be the largest banks, also.
If Wells Fargo has to stoop to such tactics to make a buck, it would appear they are badly in need of money now that the Fed is ( theoretically) not giving
free money to banks any longer.
Altho...could be just pure greed, plain and simple.
GummyBearz
(2,931 posts)And prosecute these fraudulent bankers. If only...
wordpix
(18,652 posts)Of course, the repukes would not let her chair the bureau due to her radical stands.
DorothyG
(95 posts)mostly due to banks allowing purchasers to take out loans for which they couldn't qualify? This sounds more sinister. The bank employees did things to people without their knowledge.
Skittles
(153,298 posts)it was the fault of bankers then and it is the fault of bankers now
Earth_First
(14,910 posts)Complete RW blame meme...
DorothyG
(95 posts)but it seems a little more sinister when the banks are committing their deeds without the slightest customer knowledge. It's one thing to give a loan and a possible chance of success to people - some of the loans actually allowed people to buy homes they were able to keep. My point was that it seems an entirely different level of maliciousness to do something to them without their knowledge and for which they have zero chance of benefitting.
Skittles
(153,298 posts)it was NEVER the fault of poor people - it is SINISTER now, it was SINISTER then - fuck these bankers
DorothyG
(95 posts)I never blamed 'poor' people. iirc a sizable chunk of the bad loans were to fairly well off people buying what they thought was an 'investment' mcminimansion.
I can't seem to find the quote but I vaguely recall Sen. Barney Frank saying something about how, in spite of the problems, more poor people were able to buy homes during the time. There is not even a glimmer of a silver lining to what happened in the newest round of banker malfeasance.
Skittles
(153,298 posts)who's next - Pelosi? Soros?
*DONE HERE*
hatrack
(59,602 posts)False documentation, signature forgery, straw buyers, faked W-2s, faked income statements:
AFG Financial:
According to the press release, here is how it worked. Property locators were paid to find suitable properties for their scams, usually homes owned by people in financial distress. Other paid recruiters found what have become known as "straw buyers" with good credit ratings to stand in for the real buyers. They were told that they would be well paid, often receiving a small upfront fee, and that they would not have to make any mortgage payments.
Then the conspirators swung into high gear. Forgeries and fraudulent documents were used to enhance the straw buyer's creditworthiness. Forged W-2s and bank statements were created to inflate the straw buyer's income and assets so the maximum amount of money could be borrowed. Corrupt appraisers provided inflated appraisals for the property, much higher than its market value. Bank employees who were part of the conspiracy verified that the bank statements were accurate. Co-conspirators employed at lenders such as Countrywide and New Century Mortgage made sure that loan applications were processed quickly without any due diligence.
At the sale closing, lawyers were brought in to make sure that everything went smoothly, that no one asked any questions, and that the bulk of the sale proceeds went to the AFG principals. Title company principals made sure that funds which were supposed to go to the sellers ended up in a shell account controlled by the AFG owners. The conspirators were so brazen that in one transaction, they created a sham appraisal with a stated value of over $500,000 for a 2-family home which was, in reality, only a vacant lot.
http://www.businessinsider.com/how-widespread-mortgage-fraud-toppled-the-housing-bubble-2010-5
Countrywide:
A team of investigators went to Boston to look into the complaints in person and were shocked by what they found. Typically when youre looking for fraud youve got to really look because one of the primary components of a fraud is concealment, Foster said. These people werent concealing it. They were concealing it from corporate, but every person who walked into those branches every day was a participant.
One process was to cut a signature off one document, paste it and make a photocopy so it looks like an original signature, she continued. A part and parcel of everyday business was to do anything it took to fund a loan.
They had templates for fabricating documents, cases of Wite-Out for changing names and a method for gaming the automated underwriting systemplugging in income values until they got one that worked and allowed them to underwrite the loan. Theyd keep a template bank statement from each bank, then plug in different borrowers names and an asset amount to prove that the borrower could make the payments on the loan.
The Department of Labor report that vindicated Foster described multiple incidents of egregious fraud spread throughout the entire region, including loan document forgery and alteration, manipulation of borrowers assets and income, manipulation of the companys automated underwriting system, the destruction of valid client documents, and evidence that blank templates of bank statements from several different financial institutions were emailed back and forth among loan officers in various branches for use in forging proof of borrower income and assets.
http://www.rawstory.com/2012/07/countrywide-whistleblower-reveals-rampant-mortgage-fraud-part-of-everyday-business/
Citibank, Wells Fargo, JP Morgan Chase, BOA:
The lawsuit alleges that these notes, as well as the mortgage assignments, were never delivered to the mortgage-backed securities trusts, and that the trustees lied to the SEC and investors about this. As a result, the trusts could not establish ownership of the loan when they went to foreclose, forcing the production of a stream of false documents, signed by robo-signers, employees using a bevy of corporate titles for companies that never employed them, to sign documents about which they had little or no knowledge.
Many documents were forged (the suit provides evidence of the signature of one robo-signer, Linda Green, written eight different ways), some were signed by officers of companies that went bankrupt years earlier, and dozens of assignments listed as the owner of the loan Bogus Assignee for Intervening Assignments, clearly a template that was never changed. One defendant in the case, Lender Processing Services, created masses of false documents on behalf of the banks, often using fake corporate officer titles and forged signatures. This was all done to establish standing to foreclose in courts, which the banks otherwise could not.
Szymoniak stated in her lawsuit that, Defendants used fraudulent mortgage assignments to conceal that over 1400 MBS trusts, each with mortgages valued at over $1 billion, are missing critical documents, meaning that at least $1.4 trillion in mortgage-backed securities are, in fact, non-mortgage-backed securities. Because of the strict laws governing of these kinds of securitizations, theres no way to make the assignments after the fact. Activists have a name for this: securitization FAIL.
http://www.salon.com/2013/08/12/your_mortgage_documents_are_fake/
dixiegrrrrl
(60,010 posts)Many people who got loans could not figure out how they qualified, it was the loan originator who wrote down fake info.
AND it was the banks who sold the loans to investors, even tho they knew they were selling bad loans.
The banks also foreclosed on people who did not qualify for foreclosure.
AND
it is now hedge funds, having snapped up thousands of houses after the crash for pennies on the dollar, who are turning those houses into rentals
and making a killing because rents are higher than many mortgages were.
All of the above info. was revealed since 2008 by many housing related websites and I followed the issue very very closely since, technically, we have a mortgage where the paperwork is now questionable.
wordpix
(18,652 posts)I was considering a move in 2007 and was looking, and everything I looked at seemed too high priced to me, around $350K for a small 2 br. condo in a not-so-great part of the city and no storage, no open space was typical. When I told my real estate agent I thought everything was too pricey, she would just say, "I can hook you up with these mortgage people who can make it happen."
Luckily I did not take the bait. Main point is, the real estate people were pushing even middle income people like me to pay the inflated prices and if you don't have the money, you'll get hooked up with mortgage people, no problem.
dixiegrrrrl
(60,010 posts)When we moved here ( back here, actually, for me) to retire, we had a hefty chunk of cash but zero income, our plan was to find jobs here.
Countrywide actually gave us a mortgage at a slightly higher than usual interest rate, and we put 30% down so we could have the type of mortgage that is important: no escrow, no pre-payment penalty.
This was in 2005.
I was somewhat blown away by this, and of course, and even more appreciative come the crash.
No way could we ever do that now.
DorothyG
(95 posts)It's helpful to gain clarity from people who studied it more in depth. In part it may be like the blind people assessing the elephant - people who lived in a large city may have noticed a different aspect of the housing crisis than those in rural areas vs those in the suburbs...
napi21
(45,806 posts)3 or 4 callers told him the same thing was happening at other banks where they worked. I think it's the banks need to constantly improve earnings for their stockholders. Business has conditioned them to ALWAYS expect INCREASES, not just maintaining. It's insane, but all investors believe that and drop stocks that fail to do it.
When they ALL get their dirty and illegal laundry aired, the fines they will have to pay will be high enough to cause their stock price to melt away. I doubt it will have to same impact that the MTG. debacle did, but it's sure not going to be pretty.
dixiegrrrrl
(60,010 posts)Read a report today that all the prosecuting attorneys with the Justice Dept. wanted to open cases on the banksters but Holder put a stop to it.
Ford_Prefect
(7,927 posts)and the House on both sides of the aisle. No one is going to stand up against sugar daddy payments to the re-election campaign fund.
But this is old news in some ways. We already talked it to death over why no investment bankers were investigated or tried. Just ask Senator Warren, or the others who have raised this question.
Just don't ask it of the MSM. They don't want to hear it and treat it like CT unless they can't avoid reporting it. They react as if it's the Zinka Virus: they'll hype the fear but won't get into the hard investigation.
GummyBearz
(2,931 posts)Do you need me to make a "let me google that for you link"?
Ford_Prefect
(7,927 posts)were sidetracked and later shut down? Who wanted Holder for AG? You know it and I do but certain parties see that as disloyal.
I was starting from the premise that the oversight has been "moderated" by congress who pulled funding from some of those activities long before we had a change of POTUS.
INdemo
(6,994 posts)In fact what no one talks about is that later Congress eased some restrictions on the Major Banks that gave them the ability to charge higher CC fees and interest....
theaocp
(4,249 posts)These motherfucking scum LAUGH at their "regulators". Sure, they're squealing like fucking pigs because they've so much oversight. Gag.
Response to DonViejo (Original post)
INdemo This message was self-deleted by its author.
dixiegrrrrl
(60,010 posts)Much discussion about it on DU back then, when we were all pushing for joining a credit union.
Response to dixiegrrrrl (Reply #18)
INdemo This message was self-deleted by its author.
dixiegrrrrl
(60,010 posts)words to that effect.
Luckily we have not had to be that close to deposit date when we write checks.
Dark n Stormy Knight
(9,776 posts)I'm gonna just take a wild guess and say NO, they are not.
Ilsa
(61,712 posts)Regulators left, are extremely under-manned, underpaid, and with little authority left, I bet.
Aristus
(66,522 posts)The pressure to open accounts and close loans was intense. They didn't take any prisoners. I was ranked seventh in the entire state for production, and they still fired me for 'underperformance'. The day they fired me was one of the happiest days of my working life. That job ranked second from the bottom of the worst jobs I've ever had. I used to come home from the bank at night with raging stress headaches.
That experience convinced me to finally go back to school and make something of myself. So I guess I have Wells Fargo to thank for my being a Physician Assistant.
dixiegrrrrl
(60,010 posts)Can PAs write prescriptions?
I am trying to figure out how the medical staff managed to send a prescription by computer to the pharmacy when no doc was available.
2 of them are PAs.
Not complaining, I needed the script, just curious.
Aristus
(66,522 posts)Washington State was the first state to extend prescriptive authority to PA's. That was long before my time. Now PA's in every state have the ability to prescribe. I like the autonomy it gives me.
I rarely have a patient who disparages my professional acumen simply because I'm not a doctor. But there would probably be more of them if I had to go to my supervising physician after making a diagnosis, just to get a scrip.
I can authorize a member of my medical team to call a prescription in to a pharmacy, if needed.
dixiegrrrrl
(60,010 posts)I had been wondering how that was gonna work for me, with the doc only being available for short times, and today found it can work very fast with the PA
calling a needed script.
Also am happy for your finding a profession you like. Sometimes a "failure" at crappy jobs does lead to better things, has happened to me in the past.
Aristus
(66,522 posts)Gormy Cuss
(30,884 posts)What I've noticed anecdotally in CA is that PAs and NPs can write prescriptions for most drugs but pain killers and specialty drugs were always prescribed by a physician.
Sgent
(5,857 posts)some states restrict them from writing some controlled substances. MS used to be all controlled, but I think they changed it to II and III.
Mme. Defarge
(8,062 posts)even credit unions.
Freddie
(9,279 posts)That takes pride in NOT using high pressure sales tactics on customers. His boss was a former Wells Fargo branch manager who told the staff all about this years ago, including the part where low-paid tellers were so terrified of losing their jobs that they would open customer accounts without permission. And yes, it's not just Wells Fargo.
I bank at this place and they're great. If they ever get bought up by a huge national bank I think I'll go to the coffee-cans-under-the-mattress money management technique.
MichMan
(12,002 posts)At least your community bank pays income taxes unlike credit unions who use tax loopholes to evade them
Credit Unions provide valuable services, but if they want to compete against banks with a wide range of services, they should be responsible for supporting our government services as well.
(disclosure; my wife works for a small community bank in an administrative support role)
yardwork
(61,772 posts)On balance, I think the credit unions are more cost effective for us all.
When was the last time we were forced to bail out a credit union?
MichMan
(12,002 posts)"Two years after the peak of the financial crisis, the federal government swooped in to stabilize a crucial part of the credit-union sector battered by losses on subprime mortgages.
Regulators announced Friday a rescue and revamping of the nation's wholesale credit union system, underpinned by a federal guarantee valued at $30 billion or more. Wholesale credit unions don't deal with the general public but provide essential back-office services to thousands of other credit unions across the U.S. The majority of retail credit unions are sound, but they will have to shoulder the losses through special assessments over the next decade"
MichMan
(12,002 posts)My community bank didn't receive any bailouts. Yet they pay a variety of taxes and the credit union don the street that offers all the same services and utilizes all the same government services does not.
dembotoz
(16,865 posts)i was with the same bank for like 30 years and then bmo harris bought them out
and it became mr yuck
so i moved my business and personal elsewhere.
smallish regional bank that has enuf offices for me---have never used an atm.... and i require an office in the 2 areas i spend the most time in....has not been all love and roses but they take good enuf care of me.
marlakay
(11,534 posts)About 7 yrs ago because they were forcing us to push credit cards on everyone even if they were 18 or couldn't afford more credit. You were rated as an employee on it.
I am semi retired so quit and found another part time job, it went against my principles to push credit cards like that. Its one thing if asked but we were required to sell them!
forest444
(5,902 posts)I was a Wells Fargo teller in the late '90s and early '00s. I'm reluctant to say anything too negative about them because they were good to me and helped put me through school; $300 a week, of course, went a good bit further in those days than it does now.
Nevertheless, the pressure to upsell everything from credit cards to overdraft protection accounts (with $75 annual fees!!) to complimentary visits with our "skilled financial advisors" (usually new MBA graduates which didn't know or care in the least) was relentless. We would be forced into competition with each other - and I do mean forced, because the teller that got the fewest applications would usually be sacked in short order. The stated reason was never given; but everybody knew.
Tellers should be allowed to be tellers, the way it used to be - especially since many banks will now charge you for the "privilege" of being able to walk up to one.
Rex
(65,616 posts)I doubt it.
I left my brand name bank, Wells Fargo, 10 years ago due to the general scumminess of brand name banks. I think most people who don't want to be involved left some time ago. I admit, I do have two brand name credit cards, mainly because my credit union only has one credit card, which I have, but I needed a travel friendly card so I had to go with one of the big boys.