Wells Fargo sends refunds to some FHA mortgage customers...

[Indi Guy]

Source: Los Angeles Times

Thousands of Wells Fargo & Co. home loan customers recently received a surprise in the mail: refund checks from the big bank, along with letters saying they had paid unnecessary fees for their mortgages.

The unsolicited offers of thousands of dollars arrived with a catch — if the borrowers cash the checks, they can't later sue the No. 1 U.S. home lender. The San Francisco bank said in the letters that borrowers were put into more expensive loans when they could have qualified for cheaper ones.

Analysts said the letters sent to potentially 10,000 Wells Fargo borrowers were a way for the bank to sidestep further litigation over "steering" customers into unfavorable loans — allegations that the government has made about certain Wells Fargo operations in the past...

..."It sounds like they either found some problems themselves or the regulators discovered them and told them to get things fixed," said Paul J. Miller, an analyst who follows Wells Fargo for Friedman, Billings, Ramsey & Co.

Read more: http://www.latimes.com/business/realestate/la-fi-wells-fha-refunds-20121027,0,2097257.story

[AllyCat]

1. We supposedly got one of these, but the check keeps getting

"lost in the mail". It isn't much, but interesting that they keep saying it's been sent, but not cashed. We fill out a loss report...wait...nothing. I hate Smells Fargo. Really wish we had refinanced with someone else.

[Indi Guy]

2. And how do they handle it when...

...they're told that the check's in the mail? I'm sure they're not as patient as people like yourself.

When you rob a bank there are consequences. What recourse do you have when the bank robs you?

[AllyCat]

12. We haven't broached that yet. However, we always pay AT THE BANK.

Once they tried to tell us they never got the payment and were going to assess a late charge and report us to the credit bureaus. We found the receipt (amazing feat in our house) showing we had paid before the due date. It still took some time before they dropped the report to the credit agencies.

[Tunkamerica]

3. hmm, i've got an FHA loan through wells fargo. i guess i wasn't one of the

"lucky" ones. The loan broker was friend of a friend and I def. didn't have 20% for the down payment.

[BadgerKid]

4. Here's why: govt sued WF.

money.cnn.com/2012/10/09/news/wells-fargo-fraud/index.html

[dixiegrrrrl]

7. Here's the why behind the suit conditions:

That huge $25 billion settlement with the big Banks that the gov announced?
did not disclose that for every dollar the banks "gave back" to the homeowner,
via refunds or via mortgage debt forgiveness,
the gov. would deduct that from the fine that the banks owed.

So, what happened was, Citi was in the news for sending "mortgage loan forgiveness" letters to homeowners who had already been foreclosed on, who did not own the home anymore.
Worse yet, they sent a copy of the letter to the IRS, which considers "loan forgiveness" as income to the homeowner.

Now it sounds as if Wells Fargo is trying to lower its fine amount via letters promising, but not delivering, money to home owners.

[Indi Guy]

8. Man, these are some slippery characters...

Ya think that the guys coming up with these schemes are getting some substantial bonuses?

[BadgerKid]

13. No surprises there.

Corollary 1. Big Biz(TM) doesn't do anything out of the goodness of their hearts.
Corollary 2. Big Biz(TM) acts as if the appearance of following the rules is good enough.
Corollary 3. The IRS is always waiting for the Little Guy(TM).

[Ilsa]

5. Interesting. They gave us a credit on a WF

Credit card for a fee on our new mortgage loan after they sold the loan to FHA, I think.
I'm not sure I understand what I would be suing them about, though. The loan is relatively new.

[mulsh]

6. deep in the article is this gem

"That meant that some unethical loan officers could potentially steer borrowers to the wrong loan," said Arnold, who noted that regulatory reforms that took effect in 2011 make it impossible to pay a loan officer more for originating one type of loan rather than another.

another example of what repubs mean when they refer to "Obama's failed policies"

[midnight]

9. It refutes the P.R. meme that the people knew they were buying more house than they could afford or

some other blame excuse....

[Indi Guy]

10. No doubt. People qualified for prime rate loans were...

...steered into sub-prime contracts, which were more profitable for the lenders.

...And the MSM was all over it

[Mosby]

14. I don't think it refutes anything

People were buying houses they could not afford because they thought they could flip them for a profit in 3 to 6 months. The banks and other lenders simply enabled the greedy behavior.

The realtors and appraisers (who walked away when the shit hit the fan) started and perpetuated the bubble by inflating the value of homes, I don't see anyone going after them for all the commissions and fees they made off of overpriced homes.

[midnight]

15. I do know people do flip houses... But I think the fraud is evidenced by

contractual facts, and therefore; not about house flipping. The problem was lying about info. in those contracts....and that is why I believe the talking points early on that blamed the consumer are more about scapegoating than actual reasoning that lead to the problem...

[VPStoltz]

11. Wells Fargo shoud be run out of business. Worst bank in the country.