Former Wells Fargo Employee Claims Bank Defrauded Government Of $1.4B In Foreclosure Funding

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Former Wells Fargo Employee Claims Bank Defrauded Government Of $1.4B In Foreclosure Funding

Former Wells Fargo Employee Claims Bank Defrauded Government Of $1.4B In Foreclosure Funding

Consumerist-

There has been no shortage of lawsuits filed against Wells Fargo in recent years, from accusations the bank pushed mortgages on borrowers who couldn’t repay them to claims the company pressed employees to engage in fraudulent conduct with regard to customer accounts. Now, a recently unsealed whistleblower lawsuit melds together those issues, claiming the bank encouraged employees to withhold information from customers that could potentially lead to foreclosure proceedings. 

The former employee claims in the suit, originally filed in 2015, that he was terminated in 2014 after he learned the bank had repeatedly collected on mortgages that it didn’t have proper documentation for.

According to the lawsuit [PDF] — unsealed last week when the Department of Justice declined [PDF] to intervene in the case — the employee claims Wells Fargo defrauded the government by collecting $1.4 billion in federal foreclosure-prevention funding for loans the bank knew lacked proper documentation during the housing crisis.

[CONSUMERIST]

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6 Responses to “Former Wells Fargo Employee Claims Bank Defrauded Government Of $1.4B In Foreclosure Funding”

  1. Stupendous Man - Defender of Liberty, Foe of Tyranny says:

    The policy referred to in the complaint, at page 2, ¶ 2, as “Exhibit 1,” is available here:

    http://underdoglawyer.com/policy/

    The exhibit may also be available via PACER.

    Perhaps a good idea for folks to download the document from both sources in advance of Wells Fargo obtaining a protective order.

  2. Charles Reed says:

    Understand that Well Fargo Bank is guilty of what this complaint is saying, however this lawsuit is behind at least one Whistleblower claim in 2012 and a lawsuit in 2014 that Lynn Szymoniak and her team brought that still out there.

    Wells Fargo Bank did starting on Sept 26, 2008 the day after Washington Mutual Bank (WaMu) was seized by the OTS and declared a “failed bank”, pretended to be the owner of the WaMu FHA & VA loans and instead of rewriting the debt after telling the homeowners that the debt stop existing on Sept 25, 2008 because WaMu was not in possession of the Notes they had relinquished to Ginnie Mae who was owner of the Notes but not the debt as they did not and could not purchase, originate of sell any home mortgage loans ever!

    Ginnie Mae tricked the world by saying lender/issuers of the Ginnie Mortgage Backed Securities (MBS) will buy back the loans in the MBS if they default is not the way thing are. What the lender/issuer is doing is returning the draw that the creator of the MBS has taken against the MBS.

    It is like a pawn shop/title pawn without having to sign over the title to your car and using the value of the vehicle as a guideline to the amount that can be given. It an unsecured loan is what taken place and as the investors that purchase the MBS as in the Federal Reserve Bank are not placed into title as owner of the debt!

    Why in 2016 have we not address the bs that is the losses taken by WaMu?

  3. KYLA says:

    wells Fargo foreclosure fraud is well known and even embrace and welcome in Bergen county NJ by the new appointed Bergen county so called “judge” Edward a jerejian that is now known to all to deny due process of law to homeowners that are fighting illegal foreclosures here in north jersey

  4. lynette says:

    WELLS FARGO THE CROOKS MAKE BANK OF AMERICA LOOK LIKE ANGELLS

  5. George says:

    MORTGAGE CRISIS

    Years back the banks began to turn a mortgage into a commodity, with good paying mortgages, then they saw they were running out of this commodity, so the big banks, including Fannie & Freddie started approving loans to almost anyone and everyone, not so much to just give that person a home to have, but they were more concerned about creating more of the commodity. More securities to sell to investors. They even knew some home owners would not last several years or several months, as long as they could say to investors, “Hey, we have more mortgage backed securities to sell”.

    Now, to sell all these securities, they would have to create a mortgage assignment which is normally recorded with the county land recorders office for a fee. Physically, that would take up too much time and money, so the big banks invented and created MERS (Mortgage Electronic Registration System). This electronic service was only created to track mortgages sold and bought in the secondary securities market. MERS legally has no invested interest in the mortgage, so they truly are not able to transfer or assign the mortgage only acting as a nominee of the bank. But they are! (Wrong). The chain of title of the mortgage is broken right here at this very early stage. The mortgage/note has to be assigned from one owning entity to the next owning entity. MERS never owns the loan, but they are creating and are listed on assignments at the local land recorders office when needed. Now that the mortgage was bundled, sold and bought back and forth with investors, no continuing assignments are recorded with the county recorders office. By Law, every time a mortgage/note is sold, it must be recorded at the Land Recorders Office to maintain the integrity of the “chain of title” which reflects all the transactions of the mortgage/note. By not recording these documents, Fannie & Freddie & and all your Big Mortgage Servicing banks are saving millions-billions on recording fees, and possible taxes, etc.

    What I have found was that the Servicer of the mortgage is listed with the county recorders office as if they own the mortgage, while Fannie & Freddie or other Big Banks are selling the bundled mortgages as securities.
    Kind of like a Pizza shop cooking pizza legitimately up front, and a mobster selling off investments in the back. (Racketeering). The Servicer up front really is not the owner of the loan, and they tell you this. They also admit that your loan is owned by Freddy or Fannie, or the Investors. So when the Servicer now tries to foreclose on a homeowner, they are not truly the owner of the loan/note/mortgage, and you have to own the loan/n/m to foreclose!!! Many never even question the Servicer and walk away from their home. Now to foreclose as quick as they can, that’s where the robo-signers come in. These people do not review anything in the foreclosure paperwork about the loan, but only sign a name on the affidavit page on thousands of mortgages to get the foreclosure going before any homeowners begin to catch on.

    You see, its a matter of a quick process the Servicing banks want to achieve in order to get the property in their possession, only to sell it. The crazy thing is, when the originating bank gives the loan, then sells it to the 2nd bank which mostly ends up being the servicer, they again sell it to the 2 major players (Freddie & Fannie) or one of the other Big Banks, and they sell the mortgage back securities to investors. So after the mortgage is sold, the servicing bank gets paid for the mortgage, still collects payments toward the mortgage and a percentage goes to the Servicer, Fannie & Freddie and the Investors. So they are all making money.
    Then the Servicing bank comes to foreclose and if they are allowed to foreclose they get the home without true ownership, even though the loan is actually sold off into bits and pieces to investors. I can go on further, but to conclude, if this were a murder case, I would call this act of the banks premeditated, not an accident. This was all planned out in order to reach the highest profit they could, using the mortgage backed securities as a commodity, having total disregard, deliberately and intentionally ruining the lives of millions of homeowners and the economy as it happened from this scheme.

  6. DonDadda says:

    Its also like like the LLC craze in this country its all about passing the buck,the more you insulate the better your chances of no problems.
    In reality what they do as servicers as far as what you speak about is not illegal,its just insulating their deception,then when you ask they tell you”oh well the investor who owns your loan is”.but when you never signed the phony closing docs at the phony closing[not actually,you signed something but they never look like what you thought].
    See they pass the buck,then when you find that investor is history they tell you its in a trust thats safe from all bad things and you.So pretty much its been paid in full multiple times,but the real crime doesnt start till you get to court.
    You dont ever get to court,your papers go for you,electronically and never know what was done.America land of the free.

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