Daily Archives: September 28, 2016

Wells Fargo customers recall their shock upon discovering fraudulent accounts

The numbers at the heart of the scandal at Wells Fargo (WFC) are staggering. Over 5,300 employees were fired for creating millions of accounts without customers’ permission, under intense corporate pressure to meet high sales targets.

Zoomed out to a massive scale like this, and with lawmakers focused on finding and chewing out the higher-ups who might be responsible, it’s easy to forget this fraud ensnared actual human beings.

Yahoo Finance spoke to a few of them to get their stories about their relationships with Wells Fargo, and how they learned they had accounts created without their knowledge or permission. We also learned about what it was like to deal with credit bureaus to make sure the bogus accounts didn’t blemish their credit reports.

A surprise $30,000 line of credit

Take Micheline Maynard, a journalist and author based in Boston, one of the millions of Wells Fargo victims. “The only contact I’d ever had with Wells Fargo was when the bank briefly owned the mortgage on the house that I was selling,” Maynard told Yahoo Finance.

Unbeknownst to her, she said, that brief interaction with Wells Fargo had resulted in a $30,000 line of credit created in her name. When she was in the financing process of relocating to Boston from Michigan, her mortgage broker called and said one of the underwriters had raised concerns over the amount of outstanding lines of credit in her name. “It was the first I’d heard of it,” she said.

After this shock, Maynard calmed down and went to action, doing all the right things. First, she checked her credit report to see for herself. Sure enough, there was a $30,000 line of credit in her name. She called Wells Fargo’s customer service department, which apologized and closed the account. Then, she followed up with the credit reporting agencies, asking them to include notes explaining the situation.

Read on.

Wells Fargo whistleblower joins Zeeland, Michigan woman’s mortgage fight

ZEELAND, Mich. — Gretchen Molotky is a successful single mom who made a living in real estate, only to see the market she once worked in betray her.   Now, she’s just days away from losing a home she says is her entire life savings.

Molotky’s twisted nightmare of lost paperwork, lost payments and foreclosure is a mortgage mess.  It’s a case that a Wells Fargo whistleblower is tackling one by one, hoping to make the system accountable for this kind of tragedy.

Beth Jacobson made national headlines in 2012, working with the Department of Justice and exposing Wells Fargo’s efforts to target low income African American communities in Baltimore for shoddy sub-prime loans.

Jacobson was the top producer for sub-prime loans within Wells Fargo before the housing market crash. She now fights wrongful foreclosures across the nation.

Her case in Baltimore led to a $175 million settlement.   Now, she’s backing Molotky’s claims, saying this West Michigan mom isn’t alone in her struggle.

Read on.

U.S. says Wells Fargo to pay $400,000 to settle charges over swaps

Wells Fargo Bank has settled federal charges over inaccurate large trader reports for physical commodity swaps positions, the U.S. Commodity Futures Trading Commission said on Tuesday, ordering the firm to pay a $400,000 penalty.

In a statement, the CFTC said Wells Fargo must also “cease and desist from committing further violations” of U.S. regulations as part of the order filed and settled on Tuesday.

Read on.


Part 6

If your goal is to launder money through a brokerage account, paper losses are worth serious money. Buying imaginary shares of a stock guaranteed to lose value is an awesome way to do that. You just need someone to set it up.

SAY YOU’RE A Swiss bank and you want to launder some money for high-net-worth clients.

Here’s one way: Start by placing large quantities of the funds into a brokerage account at the bank under the name of a shell corporation.

Then, conduct multiple financial transactions with the funds, confusing the true source of the money. Once the transactions “wash” the money, it can be spent out of the brokerage account as simply as writing a check or using a credit card.

Wealthy clients will pay handsomely for this activity. Not only do they get access to funds laundered through the banking system, but by placing the money offshore in a shell corporation, they can avoid taxation in their host country. “Money laundering is tax evasion in process,” said John Cassara, a 26-year intelligence and law enforcement official and former special agent for the Treasury Department. “Shell companies make it more complicated to figure out who that money belongs to and where it’s going.”

UBS, the giant Swiss bank that self-appointed investigator Chris DiIorio suspected was part of the kind of penny-stock manipulation that wiped out his penny-stock investment in 2006, has a checkered history with these types of activities.

The bank entered into a deferred prosecution agreement with the Justice Department over cross-border activities for its clients in February 2009, paying a $780 million fine. UBS admitted that it established secret accounts for roughly 17,000 wealthy American clients “in the name of offshore companies, allowing United States taxpayers to evade reporting requirements and trade in securities as well as other financial transactions (including … using credit or debit cards linked to the offshore company accounts).”


Department of Justice press release.

Source: U.S. Department of Justice.

Read on.

Mortgage-servicer faces allegations of foreclosure fraud


A Shelby County Circuit Court lawsuit and government records revealed a pattern of fraud allegations against mortgage-servicing company Nationstar Mortgage.

The WMC Action News 5 Investigators launched an investigation of the Dallas-based mortgage-servicer after it foreclosed on the Cordova, Tennessee, home of Linda Howard. Howard and her husband had owned the home since 1998. Her attorney Kevin Snider produced records that proved Howard never missed a payment since Nationstar Mortgage started servicing her mortgage in 2011.

Also according to the records, Nationstar Mortgage suddenly started refusing her monthly payments in February of this year. From February to May, the company sent her payments back with statements posting thousands of dollars in unexplained fees like “property inspections” and “disbursement insurance.”

“I wrote them. I called them. And I got no response,” Howard said.

Snider said Nationstar Mortgage kept returning Howard’s payments and kept ignoring her requests for explanation of the fees until it foreclosed on her house in May, then sold it at auction. “Nationstar improperly foreclosed on the property,” Snider said.

Read on.

Wells Fargo CEO forfeits millions as board orders review

Now this is a joke. No one from the board takes an executive pay cut.Yet this is the same Wells Fargo board investigating Wells Fargo…lol!

Wells Fargo & Co said on Tuesday that Chief Executive Officer John Stumpf will forfeit unvested equity awards worth about $41 million and will not get a salary while the company’s board investigates the bank’s sales practices.

Carrie Tolstedt, the former head of the retail division at the center of a burgeoning sales scandal, has left the company ahead of her planned Dec. 31 retirement date, will get no severance and has forfeited unvested equity awards worth about $19 million, the bank said. Stumpf and Tolstedt will also not receive bonuses for 2016.

The penalties represent one of the biggest financial sanctions ever levied against a major bank boss and mark a sharp change from a few years ago when despite scandals at large banks, no CEO had to give back a bonus.

Read on.

NYDFS reportedly looking into Caliber Home Loans

From the New York Times:

The New York regulator made the request in a letter sent a week ago to Caliber, said the person briefed on the matter. The regulator told Caliber it was investigating multiple complaints from consumers in New York and wanted information related to the firm’s procedures for handling distressed mortgages and foreclosures.

The regulator is also asking for information about mortgages Caliber has begun writing to borrowers who have filed for bankruptcy or been foreclosed on but are repairing their credit histories. Caliber is one of the few mortgage firms that has begun making so-called nonprime loans nearly a decade after the start of the housing bust.