Wells Fargo Admits to Thousands of Foreclosure Mistakes
Oct 27th 2010 10:15PM
Updated Oct 28th 2010 7:33AM
Wells Fargo (WFC) admitted Wednesday it made mistakes in the paperwork for thousands of foreclosure cases and promised to fix them.
The San Francisco-based bank said it plans to refile documents in 55,000 of the cases by mid-November. The company said not all those cases included errors but didn't say how many thousands did.
Wells Fargo described the mistakes as technical and said it has no plans to halt the foreclosure process, though filing new paperwork will cause some delays.
"We don't believe that there are instances in which the foreclosures would not have occurred otherwise," said Teri Schrettenbrunner, a Wells Fargo spokeswoman. The documents are being refiled in the 23 states where a judge's approval is needed to complete a foreclosure.
Wells Fargo's CEO, John Stumpf, has declined to join Bank of America (BAC), Ally Financial's GMAC Mortgage and other banks in suspending foreclosures because of flawed paperwork that surfaced at several large banks.
On a conference call with investors this month, Stumpf said the bank is "confident that our practices, procedures and documentation" are accurate.
Depositions of two Wells Fargo employees have called the company's foreclosure practices into question. A Fort Mill, S.C.-based Wells employee said in a deposition taken last March that she signed between 300 and 500 foreclosure documents per day.
In another deposition taken in May, another Wells employee said he verified only the dates on up to 150 foreclosure documents he signed daily and relied on co-workers to ensure that other information was correct.
Bank of America is scheduled to meet Thursday with state officials investigating allegations the bank rushed the foreclosure process without properly reviewing documents.
A person briefed on the matter confirmed the parties will have a preliminary discussion about issues related to the foreclosure documents. The person did not give details about the meeting or who will participate. The person, who spoke on condition of anonymity, was not authorized to speak publicly.
Bank of America Resumes Foreclosures
Bank of America, based in Charlotte, N.C., said in a statement: "We have been cooperating with the attorneys general and continue to have dialogue and share information with these important stakeholders."
The bank resumed foreclosures this week after halting them temporarily to resubmit documents with a new process designed to correct any mistakes such as misspelled names or incorrect numbers.
Attorneys general in all 50 states and the District of Columbia are jointly investigating whether paperwork and legal procedures were handled properly in hundreds of thousands of cases.
Bloomberg News reported earlier in the day that state attorneys general were scheduled to meet with lenders this week on the foreclosure-document probe and had conference calls with several lenders, also known as loan servicers.
State Officials to Meet with Lenders
Iowa Attorney General Tom Miller is leading the multistate probe. Geoff Greenwood, a spokesman for Miller, confirmed that a meeting is scheduled for Thursday. He declined to comment on which banks are expected to attend.
Besides state regulators, banking regulators including the Federal Reserve are examining whether mortgage companies cut corners on their own procedures when they moved to foreclose on people's homes.
Despite the problems, the Obama administration maintains there is no need to halt foreclosures in all 50 states.
On Wednesday, Phyllis Caldwell, chief of the Treasury Department's homeownership preservation office, told a financial bailout watchdog panel that there was no evidence of risk to the financial system from the documents scandal - or from efforts by mortgage investors to force banks to buy back problem loans.