Wells Fargo, Countrywide Mortgage Settlements Give Homeowners a Bit of Relief

Wells FargoThis week brought a bit of good news and relief for some troubled homeowners in the form of two separate settlement activities from Wells Fargo & Co. and Countrywide Home Loans.

On Wednesday, Wells Fargo (WFC) reached an agreement with the Federal Reserve and agreed to pay a $85 million fine to settle civil charges -- the largest fine the Fed has ever imposed in a consumer case. The bank, which did not admit wrongdoing in the settlement, had been charged with steering customers whose credit qualified them for better rates into more expensive subprime loans, and with falsifying loan documents between 2004 and 2008. As part of the settlement, the bank has been ordered to set up a process to determine who will qualify for a refund. The Fed estimates that between 3,500 and 10,000 homeowners may be owed funds, ranging from several hundred dollars to more than $20,000.

Meanwhile, the Federal Trade Commission has begun mailing checks as part of the $108 million settlement it reached with Countrywide, now owned by Bank of America (BAC), in June 2010, the FTC said Wednesday. The FTC is distributing the settlement money among more than 450,000 homeowners, who will receive payments ranging from less than $500 to as much as several thousand dollars.

Those refunds represent repayment for excessive fees and improper charges the mortgage company levied on homeowners whose loans were serviced by Countrywide between January 1, 2005, and July 1, 2008. According to The New York Times, it took more than a year for Bank of America to identify all the borrowers it owed payment on account of Countrywide's "disorganized and chaotic" record keeping. Like Wells Fargo, the company did not admit wrongdoing in the settlement.

Maeve Brown, executive director for Housing and Economic Rights Advocates, a statewide agency in California based in Oakland, calls the Wells Fargo settlement a step in the right direction, and praises regulators for pursuing the mortgage company, but says the dollar amount is not enough.

"There are people who have suffered irreparable harm and lost whatever down payment they had ... and also had their credit wiped out," Brown said. "Kudos to regulators for taking a step that makes a statement and ordered Wells to compensate borrowers. ... but I fear it will be more symbolic than actual."

Kristina Bedrossian, spokeswoman at the California Reinvestment Coalition, voiced a similar reaction. "Those $1,000 or $2,000 payments will not do anything to right the wrongs that have been perpetrated against countless homeowners," she said. "In the end, many of these people have lost their homes."

It remains to be seen how long it will take Wells Fargo to identify all the homeowners it owes refunds to, and start making payments. But Countrywide's 12-month delay illustrates the disorganization that is prevalent in the large-scale mortgage brokers, and underscores the need for disclosure about the industry's operating systems, said Brown. "There are 4-year-olds who organize their crayons more effectively," she said.





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annawillim

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June 22 2013 at 4:22 PM Report abuse rate up rate down Reply
connie

how do you find out if you qualify for refund

August 18 2011 at 9:07 PM Report abuse rate up rate down Reply
marine1942

Wasn't it Countrywide who gave Chris Dodd a sweetheart of a deal ? Anybody investigate Dodd ? We all know what Barney Frank got for his payoff---

July 24 2011 at 5:53 PM Report abuse +1 rate up rate down Reply
jenkiii

I was so grateful that Countrywide approved my loan to purchase my first home I really did not care about the high interest rates. This was back in 1994. I was 27 and i found my dream home so I thought. 17 years later I have paid 17k on the principal and the house is worth half of what I paid for it. I am glad that its a great home so just maybe I can ride this crap out, having said that I am not going to point any fingers at any one. Thanks GW.

July 23 2011 at 10:19 AM Report abuse +1 rate up rate down Reply
sgtdjusmc

why dont you all look up who repealed GLASS-STEAGALL ..it wasnt a republican you idiots!!!

dems are thieves who just want to steal money from one group and give it to another group..

July 23 2011 at 7:09 AM Report abuse +2 rate up rate down Reply
bessiereiter

After what seemed like a lifetime of thirty-Year adjustable-rate mortgages, with monthly mortgage payments going up all the time, The "123 Refinance" helped me to lock in a great low fixed rate of 3.16%, helping me to guarantee myself the ability to always make my mortgage payment on time with money to spare.

July 23 2011 at 6:23 AM Report abuse rate up rate down Reply
leetjbgsucjob

YOU DOPEY TEA BAGGERS ARE SO ECONOMICALLY ILLITERATE ! BARACK IS GOING TO WIN AGAIN IN 2012 !

July 22 2011 at 7:34 PM Report abuse rate up rate down Reply
fmirabelli

Average amount $240.00 spread among 250,000 homeowners who either lost their home or are in the fight of their life to hold on to their home. Paltry amount especially since the banks were giver more than 700 BILLION to lend and never did lend any money...just bought assets. Keep going Obama, your justice department is doing a real crummy job.

July 22 2011 at 6:28 PM Report abuse +2 rate up rate down Reply
jkennedy806

Up to the banks, that's how we got in this mess in the first place..... what a crock of crap .... 10,000 homeowners, yeah right that's not alot either. when there a millions of fraud closed homes on the shadow market right now.
The economy will never ever get better, until the banking problem is addressed.

July 22 2011 at 3:31 PM Report abuse +1 rate up rate down Reply
chasgustaf

Mary Lou It is called DEREGULATION started under George W. Bush. Current TEA/PUBLICANS want MORE deregulation.

July 22 2011 at 2:35 PM Report abuse -1 rate up rate down Reply
1 reply to chasgustaf's comment
jkennedy806

I wouldn't be blaming it all on the republicans, Barney Frank the head of Fannie, Freddie and the banking commission did his fair share of this mess as well.

July 22 2011 at 3:32 PM Report abuse +2 rate up rate down Reply