The Iowa Attorney General’s Office is investigating Wells Fargo after its employees opened up millions of unauthorized accounts.
“I think it’s pretty clear that opening accounts in people’s names without their authorization or knowledge would be an unfair, deceptive act or practice,” said Assistant Attorney General Patrick Madigan, who works with the office’s Consumer Protection Division.
Janice Rivers found her dream home on Souder Street in northeast Philly. The 52-year-old teacher’s assistant for the Philadelphia School District bought the two-floor condominium in the winter of 2001 for $66,000. It had everything she was looking for: two spacious bathrooms, a deck for barbecuing, and a finished basement large enough to act as a workspace. This house is where she had planned to spend her golden years. But despite the memories she’s made here over the past 16 years and all the hopes she had for it, Rivers is now on the verge of losing her beloved house.
Rivers is one of the numerous black and Latino homeowners in Philadelphia who believe Wells Fargo has ripped them off. She’s been on the brink of homeownership disaster for the past two years, and she says it is due to the runaround Wells Fargo has given her on a loan modification that would have cut her monthly payments almost in half. Now, facing monthly mortgage payments of about $1,000, Rivers doesn’t see a realistic scenario in which she can consistently pay off the loans.
To make ends meet, she’s tried to turn every room in the house into a revenue generator. In the basement, she runs a daycare business. Upstairs, she makes gift baskets and party decorations. But despite her efforts, the financial burden has become unbearable.
“I’ve had a lot of sleepless nights wondering what would be the outcome of my home,” she says. “I didn’t want to spend money. I didn’t want to do a vacation or work on my home. I didn’t know how much I would need to save my home, and if I would need to save it… Every penny mattered.”
In what can only be regarded as a shocking development, the United States is suing the former head of subprime mortgage trading at Deutsche Bank over “systematically and intentionally” lying about the quality of subprime mortgages that backed nearly $1.5 billion in mortgage-backed securities in the run-up to the crisis.
The lawsuit marks one of only a handful of times the government has gone after an individual for crisis-era mortgage fraud at the systemic level; an untold amount of MBS traders from this era still walk free.