Wells Fargo & Co. has agreed to pay $85 million to settle civil charges that it falsified loan documents and pushed borrowers toward subprime mortgages with higher interest rates during the housing boom. The fine is the largest ever imposed by the Federal Reserve in a consumer-enforcement case, the central bank told those sterling reporters at HuffPo Wednesday.
Wells Fargo, the nation's largest mortgage lender, neither admitted nor denied wrongdoing as part of the settlement. The bank agreed to compensate borrowers who were steered into higher-priced loans or whose income was exaggerated.
The Fed said Wells Fargo inflated borrowers' incomes on loan documents to qualify for mortgages they otherwise couldn't afford from 2004 until 2008. Wells Fargo sales personnel also pushed borrowers toward higher-interest, subprime loans, even though they were eligible for lower-interest mortgages, the central bank said…
Between 3,700 and roughly 10,000 people could be compensated under the settlement, the Fed said. The payments will likely range from $1,000 to $20,000. The loans were issued by a subsidiary, Wells Fargo Financial Inc., which was closed in July 2010, the bank said.
Read more at http://www.huffingtonpost.com/2011/07/20/wells-fargo-settlement-mortgage-abuse_n_905054.html
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