Wells Fargo Admits Foreclosure Problems, Tries To Sweep Them Under The Rug

This week, after it comically claimed to have plowed through more than 100,000 reviews of foreclosure documents in 10 days, Bank of America finally admitted that it had initiated improper foreclosures, with documents that were either incomplete or included errors. However, BofA attempted to play the whole thing off as simply a spate of unfortunate typos, rather than a systematic disregard for due process that has resulted in improper foreclosures (and the theft of at least one pet parrot).

But Bank of America has looked like the model of forthrightness compared to Wells Fargo, which has steadfastly refused to freeze foreclosures, despite the revelations regarding the “robo-signers” — bank employees who approved thousands of foreclosure without verifying basic information. In fact, Wells was on Capitol Hill insisting that its foreclosure process was sound and that it never employed robo-signers just one day before the Financial Times broke a story about Wells using robo-signers.

Now, Wells has finally admitted that it had some problems with foreclosure documents, but like BofA, it’s trying to play them off as no big deal:

The San Francisco-based bank said on Wednesday it planned to submit additional paperwork on 55,000 foreclosures before the courts in the 23 US states that require a judge’s approval before houses can be reclaimed. Wells said it expected to complete the additional filings by the middle of November…“The issues the company has identified do not relate in any way to the quality of the customer and loan data; nor does the company believe that any of these instances led to foreclosures which should not have otherwise occurred,” Wells said. Wells said it had identified instances where foreclosure procedures “did not strictly adhere to the required procedures”.

So, for Wells, not adhering “to the required procedures” means they simply get to go back and do it over. But as Yves Smith wrote, “by definition, a replacement of a robo signed affidavit is an admission the earlier submission was improper, hence a fraud on the court.”

And that’s what the banks keep trying to play down: they’re committing fraud by circumventing the legal process in place for initiating and completing a foreclosure. According to the FT, some of Wells’ documents involved possibly fraudulent notarizations, which is a problem that is more significant than a simple spelling error, and merits a real investigation.