"3. Wells Fargo Advisors LLC – the brokerage wing of Wells Fargo & Company (WFC - Analyst Report) has been slammed with a fine of $5 million by the Securities and Exchange Commission (SEC). The SEC alleged that the brokerage unit failed to maintain sufficient controls to prevent an employee from insider trading based on private information of a customer.
The SEC also alleged that Wells Fargo made unreasonable delay in producing related documents in course of the SEC’s investigation and provided “an altered” document related to a compliance review of the broker’s trading.
...The company also violated laws that make necessary for broker-dealers and investment advisers to produce correct documents and records to the SEC in due time.
Notably, Wells Fargo has accepted its wrongdoing..."
http://www.zacks.com/stock/news/148589/Bank-Stock-Roundup-Litigation-amp-Restructuring-Continue-Citi-BofA-Wells-Fargo-in-Focus
.
.
"Wells Fargo caused what the plaintiffs termed a “seven-month delay” by seeking Fifth Circuit review after the trial certified two collective action classes — one comprised of Walls Fargo home mortgage consultants and one made up of Wachovia Corp. consultants — in August. The appeals court denied Wells Fargo's petition in March. Wells Fargo acquired Wachovia in 2008.
...The court initially approved a 90-day notice period, but before the notice form for potential plaintiffs could be approved, Wells Fargo lodged its Fifth Circuit petition, resulting in a stay.
The detour to the Fifth Circuit “wasted valuable judicial resources” and made it tougher to dispatch effective notice to potential opt-ins, some of who moved or changed phone numbers, the plaintiffs argued..."
An attorney for Wells Fargo was not immediately available.
Wells Fargo is represented by David Jordan, Lindbergh Porter, Philip Ross and April Love of Littler Mendelson PC.
...The case is In re: Wells Fargo Wage and Hour Employment Practices Litigation (No. III), case number 12-20605, at the U.S. Court for Appeals for the Fifth Circuit."
http://www.law360.com/articles/442694/consultants-get-longer-notice-period-in-wells-fargo-ot-mdl
.
.
"Wells repeatedly engaged in scorched earth tactics:
While every litigant has a right to pursue appeal, Wells Fargo’s style of litigation was particularly vexing. After agreeing at trial to the initial injunctive relief in order to escape a punitive damage award, Wells Fargo changed its position and appealed. This resulted in:
"1. A total of seven (7) days spent in the original trial, status conferences, and hearings before this Court;
2. Eighteen (18) post-trial, pre-remand motions or responsive pleadings filed by Wells Fargo, requiring nine (9) memoranda and nine (9) objections or responsive pleadings;
3. Eight (8) appeals or notices of appeal to the District Court by Wells Fargo, with fifteen (15) assignments of error and fifty-seven (57) sub-assignments of error, requiring 261 pages in briefing, and resulting in a delay of 493 days from the date the Amended Judgment was entered to the date the Fifth Circuit dismissed Wells Fargo’s appeal for lack of jurisdiction;
47 and 4. Twenty-two (22) issues raised by Wells Fargo for remand, requiring 161 pages of briefing from the parties in the District Court and 269 additional days since the Fifth Circuit dismissed Wells Fargo’s appeal."
The above was only the first round of litigation contained in this case…
The judge also describes Wells’ “reprehensible” conduct:
"Wells Fargo has taken the position that every debtor in the district should be made to challenge, by separate suit, the proofs of claim or motions for relief from the automatic stay it files. It has steadfastly refused to audit its pleadings or proofs of claim for errors and has refused to voluntarily correct any errors that come to light except through threat of litigation. Although its own representatives have admitted that it routinely misapplied payments on loans and improperly charged fees, they have refused to correct past errors. They stubbornly insist on limiting any change in their conduct prospectively, even as they seek to collect on loans in other cases for amounts owed in error.
Wells Fargo’s conduct is clandestine. ...Wells Fargo simply stopped communicating with Jones once it deemed him in default. At that point in time, fees and costs were assessed against his account and satisfied with postpetition payments intended for other debt without notice. Only through litigation was this practice discovered. Wells Fargo admitted to the same practices for all other loans in bankruptcy or default. As a result, it is unlikely that most debtors will be able to discern problems with their accounts without extensive discovery….
...The burden of extensive discovery and delay is particularly overwhelming. In this Court’s experience, it takes four (4) to six (6) months for Wells Fargo to produce a simple accounting of a loan’s history and over four (4) court hearings. Most debtors simply do not have the personal resources to demand the production of a simple accounting for their loans, much less verify its accuracy, through a litigation process.
Wells Fargo has taken advantage of borrowers who rely on it to accurately apply payments
and calculate the amounts owed. But perhaps more disturbing is Wells Fargo’s refusal to voluntarily correct its errors. It prefers to rely on the ignorance of borrowers or their inability to fund a challenge to its demands, rather than voluntarily relinquish gains obtained through improper accounting methods. Wells Fargo’s conduct was a breach of its contractual obligations to its borrowers. More importantly, when exposed, it revealed its true corporate character by denying any obligation to correct its past transgressions and mounting a legal assault ensure it never had to.
Society requires that those in business conduct themselves with honestly and fair dealing. Thus, there is a strong societal interest in deterring such future conduct through the imposition of punitive relief…."
The word “predatory” is not adequate to describe Wells’ conduct. The bank is not simply willing to steal from consumers, via blatant, institutionalized violations of its own agreements on mortgages and later on bankruptcy plans. It has absolutely no respect for the law, whether it be contracts or court procedures. It’s a band of marauders that our society treats as legitimate because the perpetrators wear suits and can afford to hire lobbyists. And the Federal government and state attorneys general are certain to have emboldened Wells and its brethren by rewarding them rather than treating them like the criminals they are.
http://www.nakedcapitalism.com/2012/04/judge-rules-wells-fargo-engages-in-reprehensible-systemic-accounting-abuses-on-mortgages-hit-with-3-1-million-punitive-damages-for-one-loan.html
.
.
"The series of dispositive motions, voluminous discovery, preparation for trial, two-week bench
trial, post-trial briefing, and appellate proceedings amply demonstrate the resources both the parties and the courts have already expended, all of which would be undone if arbitration is now required. The prejudice to Gutierrez and the class stemming from Wells Fargo’s invocation of arbitration five years into this litigation—time, expense, delay and uncertainty—is apparent. See Nat’l Found. for Cancer Research v. A.G. Edwards & Sons, Inc., 821 F.2d 772, 776 (D.C. Cir. 1987) (“To give [defendant] a second bite at the very questions presented to the court for disposition squarely confronts the policy that arbitration may not be used as a strategy to manipulate the legal process.”).
...Far from facilitating streamlined proceedings, sending this case to arbitration post-appeal would be wholly duplicative and lead to further delay and expense for both parties.
http://www.consumerfinancelitigation.com/uploads/file/Gutierrez%20v_%20Wells%20Fargo.pdf
.
.
The declarations submitted with this application, describing the experiences of 97 New
York homeowners, show that Wells Fargo has not abided by its agreement. The Bank has
engaged in widespread breaches of its most basic obligations under the consent judgment that
have harmed and continue to harm thousands of New York families. Indeed, within the last few
months, the Monitor of the consent judgment announced that Wells Fargo had repeatedly failed
to comply with a key timing provision of the 2012 settlement.
The Bank has continued to subject homeowners to Kafkaesque delays and obstructions in
the loan modification process. The documents submitted herein show that the Bank made
repeated demands that one homeowner provide additional information in support of his
application for a loan modification over the course of a seven-month period. Most of the
information required from the homeowner by the Bank had either been provided with the initial
submission (such as the homeowner’s tax return for 2011) or related to trivial matters that could
have no impact on the decision whether or not to grant a loan modification (such as the demand
for a “letter of explanation” concerning a $2 amount listed on one paystub).
Many New York homeowners were similarly required by the Bank to retrieve and resubmit documents that they had already provided with their original applications months earlier. Often, the Bank’s demands for documents were cryptic and confusing, if not entirely unintelligible to the average homeowner.
...Homeowners routinely submitted modification applications that they understood to be complete, did not hear back from the Defendants for prolonged periods of time, and were then frequently delayed by requests for materials or information that were included with prior submissions...
The Bank has also subjected homeowners to repetitive and wasteful court appearances
and provided them contradictory and inaccurate information. These abuses and delays have led
to more than frustration for homeowners; they have caused the fees and interest owed by
homeowners to grow, making it harder by the day for the homeowners to obtain modifications
that would allow them to become current on their loans and avoid foreclosures.
...The end result of this pattern of misconduct was the unlawful delay, or denial, of
homeowners’ requests to modify their mortgage loans – and potentially save their homes. See
Elizabeth Lynch Decl. (“Lynch Decl.”) ¶¶ 14-15 (Lasky Ex. 3).3
...Wells Fargo made repeated additional requests for application-related materials, oftentimes because the documents that Mr. Baig submitted previously had “expired” as a result of the Bank’s delay. See Mirza Baig Decl. ¶ 12.
Finally, at a May 17, 2013 settlement conference, the court overseeing Mr. Baig’s case required the Bank to make a decision on the application by June 7, 2013. See id. ¶ 14. The Bank ignored this deadline and instead requested additional materials from Mr. Baig on June 20, 2013, two weeks after the court-ordered deadline to render a decision on the application. See id.
...borrowers who are fortunate enough to have their loans modified end up owing more than they otherwise would have if not for the Bank’s delays. See, e.g., Marie Larose Decl. ¶ 10 (Cohen Ex. 57); Mirza Baig Decl. ¶ 15 (Cohen Ex. 13).
For other borrowers, the increased arrears that result from Wells Fargo’s delays can price
them out of eligibility for a loan modification. Although there are variations between the several
different loan modification programs available to borrowers, for each of the programs the greater
the amount of arrears that the servicer must capitalize into the proposed modified principal
balance, the less likely it is that borrowers will qualify for a modification under the program’s
parameters. See Lynch Decl. ¶¶ 31-41. Accordingly, Wells Fargo’s delays in the loan
modification review process cost homeowners money and hurt their chances to qualify for a loan
modification program. See id. ¶¶ 40-41.7
Borrowers are not the only individuals who bear the costs of the Bank’s delays. Wells
Fargo’s non-compliance with its NMS obligations requires housing counselors and legal services
attorneys to expend endless hours resubmitting loan modification materials that have either been
lost by the Bank or have become “stale” as a result of the Bank’s delays. See Lynch Decl. ¶¶ 51-
52. The Bank also squanders judicial resources through an excessively protracted foreclosure
settlement process that is the product of the Bank’s continued piecemeal requests for additional
documents and prolonged decision-making process. See id. ¶ 53.8
Wells Fargo often delayed the conversion of a New York homeowner from a trial to a
permanent modification for a prolonged period of time, despite the borrower’s compliance with
the terms of the trial period plan.17 All told, among NYAG’s sample of 97 borrowers, there were
at least 11 violations of this servicing standard.18
Wells Fargo benefits from its own delays, as interest and fees that may be recovered upon foreclosure continue to be assessed on borrowers who are struggling to modify their mortgage loans. See California Monitor, The “Complete” Application Problem: A Solution to Help Homeowners and Banks Work Together (June 19, 2013), at 6 (Lasky Ex. 15) (noting that “banks have no incentive to hasten loan modifications to be complete,” as the “more fees accumulate—if a property will be foreclosed ultimately—the higher profits a servicer can earn”).
http://www.ag.ny.gov/pdfs/NMS%20MOL.pdf
No comments:
Post a Comment