Wells Fargo to pay $175M in subprime mortgage settlement

[steve2470]

Source: Chicago Tribune

The Justice Department announced a fair-lending settlement with Wells Fargo & Co., Thursday morning that will compensate tens of thousands of the bank's African-American and Hispanic borrowers who were steered into high-cost, subprime mortgages.

A $175 million price tag is attached to one part of the national settlement, compensating more than 34,000 Wells’ customers nationally whose loans were originated by non-bank mortgage brokers.

Another undetermined sum, expected to be many more millions of dollars, will be used to compensate victims who received bad mortgages directly from Wells Fargo employees. The bank still has to review its records to identify those customers.

In Illinois, the known part of the settlement includes $8 million in cash payments that will be made to 3,300 customers. It will be divided into average cash payments of $15,000 each to borrowers who were wrongly steered into subprime loans by mortgage brokers between 2004 and 2009, and an average of $1,500 to $2,000 each to minority borrowers who were wrongly charged higher fees on their mortgages.

Read more: http://www.chicagotribune.com/business/breaking/chi-wells-fargo-to-pay-175m-in-subprime-mortgage-settlement-20120712,0,964689.story

[Rambis]

1. Love these kind of settlements

People or corps willing to pay fines of 175 Mil or whatever when they made ten times the amount of the penalty.

[raouldukelives]

3. And it happens in all areas, all the way down the line.

Like some of the major wineries where I live that have to spray massive amounts of water on the grapes every night to keep them from freezing in the coastal fog. Problem is they are supposed to purchase the water from the local municipality but instead opt to pump water directly out of rivers & streams because if they get caught the penalty is less than it would cost to pay for the water to begin with.

[Rambis]

4. There you have it- (nm)

[HelenWheels]

2. This is peanuts for WF. nt

[annm4peace]

5. Peanuts!

they shouldn't be able to get off so easy.

Have they ended the evictions and foreclosures of homes from people who were preyed upon by these brokers?? Nope!

they need to stop the foreclosures.. do principal reductions and modifications.

Wells Fargo touts they have "Fair and Responsible" Lending.. yet they are still kicking people out of their homes.


the CEO and other higher ups keep cutting the lower workers pay, healthcare and retirement and don't take responsiblity for their own policies that they wrote and put into place.

[JackRiddler]

6. Wells Fargo: No admission of wrongdoing.

The settlement is a business expense. They're still ahead on it.

The responsible executives: get away cleanly, with enormous bonuses.

Lesson, as usual: Crime pays, if only you do it on a sufficiently large, bold and complicated scale. Keep doing it, you will get away with it. You are the kings of the world. The people are serfs.

Where's Judge Rakoff when you need him?