Let Valuation Tech Help Improve Your Collateral Valuation

Join this webinar to learn how technological advancements in valuation provide solutions to help lenders and servicers deliver more comprehensive offerings to their clients.

Talking proptech with FinLedger Director Holden Page

In this episode, Page discusses the hottest topics coming across FinLedger’s news desk. Topics include: the online banking market, what’s happening in the proptech space and recent private market deals.

With a reinvigorated CFPB, what’s next for the NYDFS?

While the CFPB is reinvigorated under the Biden administration, there’s plenty of room for it to retake a leading role and coordinate with the NYDFS.

Does your CRM hurt or help the customer experience?

In real estate, data is king. The more you leverage your own data the better off your agents or loan officers will be because they’ll be able to identify, target and create better customer experiences.

Mortgage

Did Wells Fargo create bogus foreclosure document manual?

WFC denies lawsuit that claims blueprint for fraud

Wells Fargo (WFC) is being accused of developing a 150-page manual for generating bogus mortgage documents to justify home foreclosures, according to a lawsuit filed in federal court in New York last week.

The manual is attorney Linda Tirelli’s “smoking gun” in a lawsuit she filed on behalf of a homeowner. The story was first reported in the New York Post, and Tirelli does have some past experience bringing these kinds of lawsuits to court.

Wells Fargo counters that Tirelli is misrepresenting the manual in several ways. It's foreclosures are legal and customer-focused, Wells said in a statement to HousingWire.

The document – a copy of which can be downloaded or viewed here – provides step-by-step guides for Wells Fargo foreclosure attorneys and the “Default Docs Team.”

Tirelli’s lawsuit alleges that Wells Fargo used the manual – the copy she entered into evidence was dated February 24, 2012 – to falsely create evidence of ownership, known as the note, and on how to proceed with a foreclosure when crucial documents are missing.

It was used by outside attorneys to request retroactive documentation that a loan had been signed over to Wells Fargo, she said.

Such endorsements are required to prove a servicer owns a loan and has the legal standing and right to foreclose and borrowers have used “show me the note” as a defense to fight foreclosure. Bankruptcy attorneys and homeowner advocates have long alleged mortgage servicers have a system for creating improper paperwork to prove ownership of loans when it is questioned.

“The significance is the first time we have an internal document that is a blueprint for fraud,” Tirelli told HousingWire Monday morning. “If you need allonge, it’s these steps; if you need assignment of mortgage, follow these steps. It provides all these steps that don’t make any sense if an attorney hasn’t spoken to anyone, and there’s not a single procedure for lawyers outside of foreclosure. All roads lead to an endorsement on the note.

“This is an instrument by which they absolutely abused the process. It's fraud because Wells Fargo is endorsing the note on behalf of another party,” she said. “We attorneys have seen this for years – these ‘ta da!’ documents that appear magically at the last second, and we knew there was a playbook like this but we couldn’t provide it. Now we can.”

Wells Fargo denied wrongdoing.

A spokesperson for Wells Fargo provided the following statement to HousingWire:

“Wells Fargo’s foreclosure processes—today and back in 2012—are appropriate, legal and customer focused. To allege otherwise is simply misrepresenting the facts.  Wells Fargo’s Foreclosure Attorney Procedures Manual provides guidelines for outside attorneys to be compliant with state and regulatory requirements. We have and will continue to abide by sound processes that ensure we comply with the law and help our customers in these situations.”

Further, Wells Fargo says, the manual has been updated dozens of times since the copy that Tirelli entered into evidence in her client’s lawsuit.

That did not mollify Tirelli.

“They say they updated it since 2012, but how many people lost their homes in that time?” Tirelli asked.

The Consumer Financial Protection Bureau, the New York Department of Financial Services, the New York Attorney General and other regulators are aware of or are looking into the allegations in the lawsuit.

In the run up to the housing crash, loans were sold at such a frenzied pace documentation is often hard to track down, especially given the number of originating lenders who went out of business after the market collapsed.

Tirelli is also part of a lawsuit filed against Bank of America (BAC) in June 2013 where seven former BA employees allege that they were given bonuses to foreclose on borrowers.

Most Popular Articles

Will we ever see a “normal” housing market again?

The question on everyone’s minds: When will this hot housing market cool down? Arch MI investigates this and more in its Spring Housing and Mortgage Market Review.

Jun 22, 2021 By

Latest Articles

Mortgage rates jump back up to 3.02%

The average 30-year fixed-rate mortgage rose nine basis points from the week prior to 3.02%, according to data released Thursday by Freddie Mac‘s PMMS. This is the first time in ten weeks mortgage rates have risen above 3%.

Jun 24, 2021 By
3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please