Showing posts with label John Stumpf. Show all posts
Showing posts with label John Stumpf. Show all posts

Friday, August 5, 2011

WELLS FARGO AGREED TO THE LARGEST SECURITIES CLASS ACTIONS SETTLEMENT SO FAR STEMMING FROM THE CREDIT CRISIS

Wells Fargo, KPMG reach $627-million settlement of lending suit

The legal fallout from high-risk, boom-era mortgage lending never stops, it seems -- the latest example being Wells Fargo & Co.'s $590-million proposed settlement of a class-action lawsuit centering on controversial "Pick-a-Pay" loans issued by Oakland's World Savings.
The San Francisco bank disclosed the deal Friday in its quarterly report to the Securities and Exchange Commission. It would settle claims brought against Wachovia Corp., the big bank Wells took over during the financial crisis, which, in turn, had acquired World Savings' parent, Golden West Financial, in 2006.
Wells branch-credit Paul Sakuma APWells said its financial reporting would not be affected because it already had set aside funds to cover the gigantic settlement.
Wells admitted no liability or wrongdoing by Wachovia in settling with the plaintiffs, mainly pension funds, who had bought bonds and preferred stock from Wachovia in 2007 and 2008.
In several lawsuits consolidated before a federal judge in New York, they alleged that Wachovia had been negligent in failing to disclose the risks embedded in the portfolio of Pick-a-Pay loans, which gave borrowers the option of paying so little that the amount they owed went up instead of down.
The accounting firm KPMG, which audited Wachovia's books, has agreed to provide an additional $37 million as part of the settlement, bringing the total to $627 million, said Darren Robbins, a San Diego attorney representing the plaintiffs.
That would be the largest total settlement so far of any securities class-action claims stemming from the credit crisis, Robbins said.  The runner-up: a $624-million settlement by Bank of America and KPMG in federal court in Los Angeles of a shareholder class action alleging that Countrywide Financial Corp. of Calabasas, now part of B of A, misled investors about its financial condition and lending practices.
On a related legal front, Bank of America recently agreed to pay a far greater amount -- $8.5 billion -- to settle demands by a group of big investors that it buy back soured Countrywide loans that had been bundled up to back mortgage securities. Many big banks, including Wells Fargo, are facing similar demands by investors in bonds backed by subprime and other high-risk mortgages.
A Wells Fargo spokeswoman, Mary Eshet, said the bank agreed to the settlement "to avoid the distraction, risk and expense of on-going litigation."
Wells Fargo’s shares were down 63 cents, or 2.4%, at $25.11 in midday trading. The stock has fallen more than 13% since its recent high of $29.01 on July 22, before the big sell-off in the stock market.
RELATED:
-- E. Scott Reckard 
Photo: A branch of Wells Fargo, which said it already had set aside funds to cover its $590-million lawsuit settlement announced Friday. Credit: Paul Sakuma / Associated Press
Twitter: @latimesbiz
Facebook: latimesbiz
More in: Banking, Countrywide Financial, E. Scott Reckard, Lawsuits, Mortgage fraud,Mortgages, Wells Fargo

More from Money & Company



Related articles
Enhanced by Zemanta
Posted by at No comments:
Labels: , , , , , , ,

Wednesday, July 27, 2011

WELLS FARGO CUTTING MORE JOBS

Wells Fargo cutting jobs at Minneapolis brokerage group

  • Article by: Star Tribune 
  • Updated: July 27, 2011 - 8:16 PM
Employees at Wells Fargo & Co.'s brokerage operations group in Minneapolis were told Wednesday that they have until sometime this fall to find other jobs.
The bank has about 18,000 employees in the Minneapolis area, and the announcement concerned fewer than 150 of them, spokeswoman Peggy Gunn said. She declined to provide a specific number of expected layoffs, noting that the employees will have an opportunity to find new jobs with the company.
"Usually we don't get into specifics about numbers because these are positions that are being eliminated due to business needs," Gunn said.
Employees aren't necessarily being eliminated, she said, but their current positions will be phased out.
DAN BROWNING

Related articles
Enhanced by Zemanta
Posted by at No comments:
Labels: , , , , , , ,

WELLS FARGO TO REEVALUATE REFINANCE LOANS BETWEEN 2006 AND 2008


Wells Fargo Said to Be in Talks With U.S. in Lending Probe

Q
By Justin Blum and Tom Schoenberg - Jul 27, 2011 3:34 PM CT
Enlarge imageWells Fargo Said to Be in Talks With U.S. in Lending Probe
Wells Fargo & Co. is being probed whether the lender directed blacks to subprime loans, a person familiar with the matter said. Photographer: Jin Lee/Bloomberg
Wells Fargo & Co. (WFC), the biggest U.S. home lender, is negotiating with the Justice Department to resolve a probe of whether the lender directed blacks to subprime loans, a person familiar with the matter said.
The investigation is being conducted by the Justice Department’s Civil Rights Division and involves the lender’s actions during the housing bubble, said the person, who wasn’t authorized to speak publicly.
Wells Fargo still faces a 2008 lawsuit by the city of Baltimore alleging a “pattern or practice of illegal and discriminatory mortgage lending” leading to foreclosures on Wells Fargo loans in minority neighborhoods.
And last week, the bank agreed to pay a record $85 million fine and compensate clients to settle Federal Reserve claims that it steered reliable borrowers into subprime loans and falsified information in mortgage applications.
Employees at the firm’s Wells Fargo Financial unit pushed customers who may have been eligible for prime interest rates into loans carrying higher rates intended for riskier borrowers, the Fed said in a July 20 statement announcing the accord.
Separately, sales personnel used false documents to make it appear borrowers qualified for loans when their incomes made them ineligible, the Fed said.

‘Confident’

Vickee Adams, a spokeswoman for San Francisco-based Wells Fargo, and Alisa Finelli, a Justice Department spokeswoman, declined to comment on the U.S. discriminatory lending investigation. Of the Baltimore case, Adams said the bank is “confident in our position in the lawsuit.”
Under its settlement with The Fed, Wells Fargo must reevaluate qualifications of borrowers who received a subprime, cash-out refinancing loan between January 2006 and June 2008.
The fine was the largest assessed by the regulator in a consumer-protection enforcement case, according to the statement. The bank didn’t admit wrongdoing in agreeing to settle, the government said.
The U.S. settlement talks were reported earlier in the Huffington Post news and opinion web site.
The Baltimore case is Mayor and City Council of Baltimore v. Wells Fargo, 08-cv-00062, U.S. District Court, District of Maryland (Baltimore).
To contact the reporters on this story: Justin Blum in Washington at jblum4@bloomberg.netand; Tom Schoenberg in Washington at tschoenberg@bloomberg.net.
To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net and; Mark Silva at msilva34@bloomberg.net
Want to save this for later? Add it to your Queue!

Related articles
Enhanced by Zemanta
Posted by at No comments:
Labels: , , , , , , ,
Subscribe to: Comments (Atom)