Well Fargo, the nation’s largest mortgage servicer, is in legal hot water.
A New York attorney exposed the existence of a secret internal document — “Wells Fargo Home Mortgage Foreclosure Attorney Procedures Manual, Version 1” — that allegedly details in-house Well Fargo procedures on how to fabricate key documents, known as endorsements, on demand to justify foreclosures. Lenders need endorsements to prove that they own the mortgage, before they can foreclose on a borrower.
On March 12, bankruptcy attorney Linda Tirelli alleged in a White Plains, N.Y., court that she unearthed a 150-page manual, written Feb. 24, 2012, outlining detailed procedures to fabricate foreclosure documents. Catherine Curan at the New York Post broke the story.
On April 8, U.S. judge Allan Gropper admitted the 150-page manual as evidence in a lower Manhattan bankruptcy case of a homeowner in foreclosure being defended by Tirelli against Wells Fargo. Tirelli’s case alleges that Wells Fargo used the manual to falsely create evidence of ownership.
Now Tirelli can depose Wells Fargo executives under oath.
Wells Fargo denies wrongdoing, countering that Tirelli is misrepresenting the manual.
But the allegations rekindle claims that banks, including Wells Fargo, illegally create documents to quickly foreclose on delinquent borrowers, a practice known as “robo-signing.” On Feb. 19, 2012 — a week prior to the publication of the Wells Fargo Manual — a landmark $25 billion national mortgage settlement between 49 states attorneys general and the five largest U.S. lenders was announced. The settlement was supposed to put an end to those illegal practices, but defense attorney Tirelli says nothing has changed.
“This is a blueprint for fraud,” Tirelli told The Washington Post. “The idea that the bank is instructing people how to produce these documents is appalling.”
Tirelli called the improper Wells Fargo documents “ta-da endorsements.”
The Wells Fargo manual — a copy of which can be downloaded or viewed here — provides step-by-step instructions for Wells Fargo foreclosure attorneys to follow.
In the old days, the bad guys robbed the banks. Now who is robbing whom?.
Where’s the U.S. Department of Justice? Where’s the Consumer Financial Protection Agency? Should borrowers be concerned about how Well Fargo conducts its business?