Wells Fargo Agrees to Pay Over $2 Billion To Settle Claims Against the Bank Regarding Residential Mortgage-Backed Securities

Posted on August 3rd, 2018 at 12:00 PM
Wells Fargo Agrees to Pay Over $2 Billion To Settle Claims Against the Bank Regarding Residential Mortgage-Backed Securities

From the Desk of Jim Eccleston at Eccleston Law LLC:

The U.S. Department of Justice (DOJ) has announced that Wells Fargo Bank has agreed to pay $2.09 billion to end allegations of misrepresentations to investors between 2005 and 2007 after the bank had ramped up its subprime lending ahead of the financial crisis.

More specifically, in its complaint, the DOJ asserted that even though Wells Fargo knew that a significant percentage of borrowers had inflated their income on their applications, the bank failed to disclose that information to investors who bought residential mortgage-backed securities. Wells Fargo became aware that a significant percentage of borrowers had inflated their income on their applications by comparing a borrower’s stated income to their tax records. Moreover, according to the DOJ, the majority of loan applications had a gap between their stated income and tax records, and Wells Fargo employees, including top executives, saw the reports.  

Furthermore, when the market crashed in 2008, Wells Fargo had at least 73,529 loans backing securities during the three years at issue, and close to half of them eventually defaulted, causing billions in losses.

Without admitting or denying the allegations, Wells Fargo agreed to pay the civil penalty to avoid litigating claims brought under the Financial Institutions Reform Recovery, and Enforcement Act.

The attorneys of Eccleston Law LLC represent investors and advisors nationwide in securities and employment matters. The securities lawyers at Eccleston Law also practice a variety of other areas of practice for financial investors and advisors including Securities FraudCompliance ProtectionBreach of Fiduciary DutyFINRA Matters, and much more. Our attorneys draw on a combined experience of nearly 65 years in delivering the highest quality legal services. If you are in need of legal services, contact us to schedule a one-on-one consultation today.

Related Attorneys: James J. Eccleston

Tags: james eccleston, eccleston law, eccleston law llc, eccleston, wells fargo, mortgage

Return to Archive

TESTIMONIALS

Previous
Next

As a financial advisor with over 20 years of experience, I feel fortunate to call Jim my attorney and friend. He is a fantastic lawyer and trusted advisor. He is skilled in the matters necessary to do the job well. He uses his thoughtful approach and calm demeanor to achieve a positive outcome for the client. If you want to feel confident that nothing will be missed and that you will be represented in a highly professional manner, call Jim Eccleston.

Bill C. and Dan M.

LATEST NEWS AND ARTICLES

May 17, 2024
Fidelity Advisor Files Lawsuit Alleging Wrongful Termination Over Whistleblowing

A former Fidelity Investments advisor, Michael Maeker, has initiated legal action against his former firm, alleging wrongful termination in response to his reporting of anti-investor sales tactics.

May 16, 2024
CFTC Investigates Banks for Potential Whistleblower Suppression

The Commodity Futures Trading Commission (CFTC) has initiated inquiries into several banks, including JPMorgan Chase, Bank of America, and Citigroup, regarding potentially hindering whistleblowers from disclosing information, as reported by Bloomberg News.

 

May 15, 2024
NFA Issues Order Against 50.ai Investments LLC

The National Futures Association's (NFA) Business Conduct Committee (BCC) has taken action against 50.ai Investments LLC, a former NFA Member commodity pool operator and forex firm, for violating multiple NFA compliance rules.