U.S. Trustee Program Reaches $81.6 Million Settlement with Wells Fargo Bank N.A. to Protect Homeowners in Bankruptcy

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U.S. Trustee Program Reaches $81.6 Million Settlement with Wells Fargo Bank N.A. to Protect Homeowners in Bankruptcy

U.S. Trustee Program Reaches $81.6 Million Settlement with Wells Fargo Bank N.A. to Protect Homeowners in Bankruptcy

Department of Justice
Office of Public Affairs
.

FOR IMMEDIATE RELEASE
Thursday, November 5, 2015
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U.S. Trustee Program Reaches $81.6 Million Settlement with Wells Fargo Bank N.A. to Protect Homeowners in Bankruptcy

Settlement Addresses the Bank’s Errors Affecting Nearly 68,000 Accounts of Homeowners in Bankruptcy

The Department of Justice’s U.S. Trustee Program has entered into a national settlement agreement with Wells Fargo Bank N.A. (Wells Fargo) requiring Wells Fargo to pay $81.6 million in remediation for its repeated failure to provide homeowners with legally required notices, thereby denying homeowners the opportunity to challenge the accuracy of mortgage payment increases.  These failures violated federal bankruptcy rules that took effect in December 2011 and imposed more detailed disclosure requirements to ensure proper accounting of fees and charges on homeowners in bankruptcy.

Bankruptcy Rule 3002.1 requires mortgage creditors to file and serve a notice 21 days before adjusting a Chapter 13 debtor’s monthly mortgage payment.  Wells Fargo acknowledges that it failed to timely file more than 100,000 payment change notices (PCNs) and failed to timely perform more than 18,000 escrow analyses in cases involving nearly 68,000 accounts of homeowners in bankruptcy between Dec. 1, 2011, and March 31, 2015.  Under the settlement, Wells Fargo also will change internal operations and submit to oversight by an independent compliance reviewer.  The proposed settlement has been filed in the U.S. Bankruptcy Court for the District of Maryland, where it is subject to court approval.

“I am pleased that Wells Fargo has acted responsibly by accepting accountability for its deficient bankruptcy practices, agreed to compensate affected homeowners for those deficiencies and committed to making necessary improvements in its bankruptcy operations,” said Director Cliff White of the U.S. Trustee Program.  “When creditors fail to comply with the bankruptcy laws and rules, they compromise the integrity of the bankruptcy system and must be held accountable.  Transparency in the process is of paramount importance.  Homeowners in bankruptcy have the right to proper and timely notices, particularly when they are being asked to pay more.  The U.S. Trustee Program remains diligent in its effort to hold financial institutions that disregard the law accountable for their actions.”

Settlement Terms

Wells Fargo agrees to pay a total of $81.6 million to homeowners who were in bankruptcy between Dec. 1, 2011, and March 31, 2015, and who were affected by Wells Fargo’s failure to timely file PCNs and escrow statements, including:

  • $53.6 million will be paid to more than 42,000 homeowners whose payments increased as to which Wells Fargo failed to timely file a PCN with the court. The payment will be in the form of a credit to the homeowner’s mortgage account in a lump sum amount, which averages $1,254 per homeowner and varies depending on the homeowner’s mortgage balance. More than 70 percent of the total payments will go to homeowners who have mortgage balances under $300,000. These payments will be made regardless of whether homeowners actually paid the increased amount.
  • An estimated $10 million will be paid by crediting homeowners’ accounts at the end of their bankruptcy cases if, upon a detailed review of the accounts, it is determined the homeowners were not fully compensated through the initial crediting process described above. Wells Fargo estimates that 15 to 20 percent of homeowners who receive the initial payments will be due additional amounts at case closing.
  • $1.5 million will be refunded in cash to about 3,000 homeowners where notices of decreases in monthly payments were not timely provided and the homeowners paid more than the actual amount due.
  • $1 million will be refunded in cash to about 2,400 homeowners who satisfied escrow shortages by making a lump sum payment, but whose monthly payments did not decrease to account for the lump sum payment.
  • $4.5 million will be paid by crediting the mortgage escrow accounts of about 6,000 homeowners who did not receive timely escrow statements. Wells Fargo will credit the amount of any increase in escrow shortage that was incurred between the time Wells Fargo should have performed the analysis and the time it actually did perform the analysis. As a result, homeowners will not be responsible for any increase in the escrow shortage stemming from Wells Fargo’s failure to timely perform the escrow analysis.
  • $4 million will be paid to about 12,000 homeowners by crediting mortgage accounts in the amount of $333, where Wells Fargo failed to timely perform an escrow analysis that would have resulted in a PCN being filed and the homeowner is not already receiving remediation for a missed or untimely PCN.
  • $4 million will be refunded in cash to about 6,000 homeowners who did not receive timely escrow statements and whose escrow accounts contained surpluses that Wells Fargo had not refunded or credited toward the next year’s escrow payment.
  • $3 million in remediation to about 8,000 homeowners has already been completed by Wells Fargo for certain violations.

In addition to the monetary remediation, Wells Fargo will make changes to internal procedures to prevent recurrence of the violations.  These changes include improvements to its computer platform, improvements to employee training and oversight and implementation of quality control processes to ensure the accuracy and timeliness of PCNs and escrow statements.

The settlement resolves any actions that could be brought by the U.S. Trustee Program for the covered conduct, but does not limit the rights of any homeowner or other third party to take action against Wells Fargo.

Wells Fargo and the U. S. Trustee Program have selected Lucy Morris of Hudson Cook LLP, to serve as an independent reviewer who will verify that Wells Fargo complies with the settlement order.  The independent reviewer will file periodic public reports with the bankruptcy court.  Wells Fargo will pay all costs associated with the compliance review, including the compensation of the independent reviewer.

Homeowners with questions about the settlement may contact Wells Fargo at 1-800-274-7025.

Director White commended the U.S. Trustee Program team who expertly investigated, litigated and settled this matter, including Deputy Director and General Counsel Ramona Elliott, Senior Trial Attorney Diarmuid Gorham, National Creditor Enforcement Coordinator Gail Geiger, Assistant U.S. Trustee Catherine Stavlas and Trial Attorney Kelley Callard.

The U.S. Trustee Program is the component of the Justice Department that protects the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws.  The U.S. Trustee Program has 21 regions and 93 field office locations.

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15-1361
Updated November 6, 2015
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Source: http://www.justice.gov
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3 Responses to “U.S. Trustee Program Reaches $81.6 Million Settlement with Wells Fargo Bank N.A. to Protect Homeowners in Bankruptcy”

  1. Charles Reed says:

    Wells Fargo Bank in handling the Washington Mutual Bank Federal Government loans (FHA, VA, USDA) that were in the Ginnie Mae Mortgage Backed Securities (MBS), did violate US laws when having forgeries created by MERS to obtain the Titles/Liens in order to act as if they where the owner of the loans.

    However what happen is Wells did not purchase any of the loans and could not purchase them. So the loan were free and clear because the loan Notes being endorsed in blank and relinquished to Ginnie Mae, made final the separation of the Note & Debt.

    President Obama was right back in Mar 2009 when he thought that these loan should have gone in front of a bankruptcy court in non-judicial States, because the loan are actually being foreclosed while the Notes are forever in the possession of Ginnie Mae.

    We got 64% of 50,000 Dept of VA request of the HAMP & VA HAMP in non-judicial States that never received an underwriting, but instead all were illegally foreclosed in 2009-2010. However with just the 32,000 equals $3.52 billion which include the treble and false insurance claims against the VA Guaranty Fund! But its not the end of the crime which 800,000 citizens had their 4th Amendment Rights violated!

  2. http://kareemsalessi.com/litigation-discovery-documents/

    NOTICE TO COURTS ACROSS THE UNITED STATES;

    Any decision in favor of any Wells Fargo entity amounts to legalizing drug money laundering since Wachovia swept its half a trillion dollars of drug money under Wells Fargo rugs in 2008, as engineered by federal agencies, and their lawyers.

    Google: “U.S. Facilitates Drug $$ Laundering”
    takes you to the above webpage with links to other documents proving that U.S. entities and U.S.-DOJ directly aided & abetted “Wells Fargo Drug Cartel” to launder over half a trillion dollars of drug money from “Wachovia Drug Cartel” and to continue to launder drug money for ever, as I have documented since several years ago on my above webpage’s top two links, plus the court-filed documents lower down, and those not posted there.

    Following the top links should take you to my personal ultimate prescription against Wells Fargo’s drug money laundering operations with the legal reasoning that because the bulk of the drug money mortgages laundered under the Wells Fargo flag has been subject to forfeiture by USA, and/or by Wells Fargo’s victims, and since U.S.A. has waived its forfeiture rights and even aided & abetted the drug cartel in its drug money laundering, then the Cartel’s victims should be able to legally forfeit all of the Cartel’s mortgages since the mortgages are either laundered drug money, have been tainted with drug money, or are purely fictional as the majority of mortgages are.

    With the stroke of a pen, a blanket national order from the U.S. DOJ, or a new act of Congress, can nullify all of Wells Fargo Drug Cartel mortgages, plus all of its associated Wachovia drug-money laundering foreclosures, by nullifying them on a national level, or by issuing an injunction against the Cartels to ban them from billing borrowers for mortgage payments.

    That would not only be an historic boost to the U.S. economy, but also a major deterrent to drug traffickers, whose ultimate goal is to traffic drugs into USA, and to launder and invest, their global drug money proceeds inside USA, as they have done with drug money invested through “Wells Fargo Drug Cartel” since 2007, when FDIC, IRS, the Fed., and DOJ, quietly began engineering Wachovia’s transfer into Wells Fargo, as a routine federally-assisted drug money laundering bailout from forfeiture.

    It is noteworthy that the above Cartels’ lawyers have acted not only as direct agents and CONSIGLIERES of drug traffickers, but also as principals of their own crime-frauds, by taking assignments from the Cartels.

    Cartels’ lawyers have known all along whom they have been working for and that their “legal assignments” have been in furtherance of international drug trafficking and drug money laundering.
    Therefore, it is only logical that the American Bar Association (ABA), in the first instance, suspend the Cartel lawyers’ licenses across USA, and to obtain accounting of their services and fees billed to Wells Fargo & Wachovia Drug Cartels.
    Colossal amounts of billing for bribery of public officials would undoubtedly surface, whereupon those lawyers, and the bribed public officials, should be tried in a collective Nuremberg Trial style prosecution.

    Last month, in this website, I posted links to S.E.C. documents proving SEC’s aiding & abetting & the promotion of Wells Fargo lawyers in bribing public officials with SEC’s “NO ACTION LETTERS”, meaning that the SEC has no objections to the Cartel’s continuing bribery of public officials.

    For my personal witness testimony in your cases against the Cartels, and/or their lawyers, and about their bribery schemes of public officials, you can contact me below:

    http://disclosurerealty.com/home.asp

    Full refunds if my testimony disproved by anyone.

    “Kareem Salessi 11/11/15”

  3. http://kareemsalessi.com/foreclosure-crimes/

    Mr. Charles Reed:

    CIA Hitman: How Attorneys; County Recorders; Banks, Launder Drugs With Real Estate

    Radio Stew Webb and CIA Whistleblower Gene Chip Tatum 1997
    https://www.youtube.com/watch?feature=player_embedded&v=Bs2byHPFkhM

    Above is how some of these HUD/FHA/VA based frauds used to be done with hundreds of thousands of properties, around twenty years ago, before the new criminal devices like MERS were invented.
    Fraudulent title transfers were engineered by HUD, CIA attorney, and county recorders, starting at 25th minute of recording.

    After 9/11, financial crimes syndicates advanced into conducting global financial crimes by using new inventions like MERS, MBS, RMBS, REMICS, facilitating the plunder of hundreds of trillions of dollars from foreigners without using county reocrders, in addtion to the plunder of U.S. homes by utilizing county recorders to record the criminally produced papers which you mention above.
    Therefore, all county recorders, and county governments across the country, have been active participants in the colossal mass-plunder of american real-estate since 2001.

    The above and other related documents are linked in my above webpage which can also be found in Google: “U.S. FORECLOSURE CRIMES”

    The complicity of plaintiffs’ attorneys, prosecutors, and the FBI, in the recent financial crimes, have been witnessed to in this recent report:

    Michelle Hansen Mortgage Fraud Interview with Stew Webb, Will P. Wilson, AllDayLive, MediaCific,

    https://www.youtube.com/watch?v=TZVfJ2PA8N8

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