Mortgage

Wells Fargo fires 2 employees for participation in low-income housing scandal

Justice Department investigates possible collusion from Wells Fargo, other banks

Wells Fargo fired two of its employees for their role in connection with a probe into the company’s negotiation and procurement of low-income housing tax credits, people familiar with the matter told Bloomberg.

The two employees, Rick Davis, a senior vice president, and Bob Kixbull, a vice president, were fired after being suspended earlier this year, according to the article by Hannah Levitt.

But this move is not letting the bank off the hook from the investigation by the U.S. Department of Justice.

From the article:

The Justice Department is investigating whether Wells Fargo and other banks colluded with developers to lower the price of bids for low-income housing tax credits. The credits are part of a federal program created in 1986 to encourage the development of affordable housing units.

Wells Fargo refused to respond to HousingWire's request for comment, saying the bank doesn’t comment on personnel matters.

This is just the latest trouble for Wells Fargo in a seemingly never-ending cycle of bad news for the bank and its customers.

For example, earlier this year, Wells Fargo revealed that a software error in its mortgage underwriting system led to hundreds of unnecessary foreclosures. Then in November, reports revealed the problem was even bigger than the bank first thought.

Back in October, the once-impenetrable megabank was ordered to pay $65 million for allegedly lying to investors about its retail sales practices that led to millions of fake accounts being opened in customers’ names, and calls for its CEO to resign grew louder thanks to Sen. Elizabeth Warren, D-Mass.

Wells Fargo also announced that two of its top executives are taking “leaves of absence” for an unspecified length of time and will no longer serve on the company’s operating committee.

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