Tag Archives: Wells Fargo

In her first monthly report as California Monitor, Katherine Porter described the servicers' efforts to reform their practices before the October 2 deadline.

The settlement struck between the nation's five largest mortgage servicers and the U.S. Department of Justice and 49 state attorneys general calls for reforming mortgage servicing practices with the implementation of more than 300 standards. As described by the attorneys general's own negotiating committee, the banks must "accomplish a massive undertaking" to put all the servicing standards into practice as ordered under the agreement. They were given 180 days.

Five months after the nation's top five servicers settled with the states attorneys general and several federal agencies to address iniquities in foreclosure processes, Joseph A. Smith, Jr., the settlement monitor, released a preliminary report to inform the public of the servicers' progress so far. Thus far, the five servicers ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô Bank of America, JPMorgan Chase, Wells Fargo, Citigroup, and Ally Financial ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô offered $10.56 billion in relief to borrowers and have implemented between 35 and 72 percent of the 304 servicing standards detailed in the national settlement.

New York-based GFI Mortgage Bankers Inc. reached a $3.5 million settlement with the Justice Department regarding discriminatory lending practices Tuesday. The lawsuit, filed in a Manhattan federal court, alleged GFI priced ├â┬ó├óÔÇÜ┬¼├àÔÇ£residential mortgage loans for qualified African-American and Hispanic borrowers higher than for similarly qualified non-Hispanic white borrowers between 2005 and 2009. GFI admitted there were ├â┬ó├óÔÇÜ┬¼├àÔÇ£significant disparities├â┬ó├óÔÇÜ┬¼├é┬Ø between loans offered to minority borrowers.

Wells Fargo announced recently that it will donate up to $500,000 in bank-owned homes to qualifying veterans and their families. The lender will hand over these properties to veterans and military families through the "Homes on the Homefront" program with Operation Homefront, a nonprofit organization dedicated to supplying onetime warriors with housing opportunities. Some of those qualifications require that recipients serve on active duty.

Outpacing industry forecasts, mortgage originations ticked up 5.2 percent in the second quarter, totaling $405 billion during the three-month period, according to a report released this week from Keefe, Bruyette & Woods. On an annual basis, originations are up 44.6 percent, according to the study. Keefe, Bruyette & Woods suggests much of the increase came from refinance activity driven by low interest rates. Keefe, Bruyette & Woods predicts strong origination volume next quarter.

While some signs suggest the housing recovery may finally be under way, others signal that banks will likely continue to see repurchase claims from Fannie Mae and Freddie Mac. Analysts with Fitch Ratings found in a report on Monday that repurchase risk remains high for several financial institutions, including Bank of America, JPMorgan Chase, and Ally Financial. According to Fitch, repurchase risk climbed to 41 percent for Bank of America. Roughly 60 percent of the claims stemmed from private-label requests.

Wells Fargo faces litigation from Best Medical, Inc., part of Virginia-based TeamBest, which creates and distributes medical products and technology. The litigation, which originated in spring 2010, was elevated to the U.S. federal court in Alexandria, Virginia, about two weeks ago. Best Medical alleges Wells Fargo discriminated against the company when calling commercial mortgage loans. The company claims its commercial mortgage loans were fully performing, and submitted payments upfront.

The FDIC launched a suit against 12 banks Friday regarding misrepresentations of residential mortgage-backed securities sold to now-defunct, Alabama-based Colonial Bank. Among those accused are some of the nation├â┬ó├óÔÇÜ┬¼├óÔÇ×┬ós largest banks, including JPMorgan Chase, Citi, Bank of America, and Wells Fargo. The 12 banks sold more than $3.88 million in securities to colonial bank, and the FDIC alleges the banks misrepresented several aspects of the loans making up the securities in the lead-up to the financial crisis.

The Office of Mortgage Settlement Oversight recently chose five new firms to serve as its eyes and ears on the ground as the $25 servicer settlement grinds forward. The new secondary professional firms ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô including BKD, LLP; Baker Tilly Virchow Krause, LLP; Crowe Horwath, LLP; Grant Thornton, LLP; and McGladrey, LLP ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô will assist settlement monitor Joseph A. Smith, Jr., over the next three and a half years. Each firm will assist BDO Consulting, a division of BDO USA, LLP, and the primary professional firm responsible for evaluations.