Wells Fargo to Pay $2.09B Fine Over Issuing Mortgage Loans with Incorrect Information

By:
Chris Gaetano
Published Date:
Aug 2, 2018
Wells Fargo

Embattled financial institution Wells Fargo agreed to pay the government $2.09 billion over accusations that, during the buildup to the financial crisis,the bank issued mortgage loans with incorrect information, which the Justice Department said directly contributed to the subsequent global economic meltdown, according to CNN Money. The Justice Department said that, between 2005 and 2007, the bank issued home loans with misstated income details and misrepresented the quality of these mortgages to investors. These investors then packaged them into mortgage-backed securities, which themselves played a key role in the crisis. While Wells Fargo paid the penalty, it did so without admitting any liability or wrongdoing and said there were no claims by the government that individual customers were harmed as a result of their practices. 

Wells Fargo can now count this one toward its growing list of scandals. For those keeping count, Wells Fargo has gotten in trouble for: 

* Directing investors to actively trade investments meant to be held for the long-term

* Opening depository and charge accounts for millions of customers without their knowledge or consent and charging them associated fees in order to meet sales goals. 

* Retaliating against whistleblowers who reported this behavior. 

* Overcharging foreign exchange customers in order to fatten executive bonuses. 

* Overbilling small business customers for processing credit card transactions. 

* Signing up hundreds of thousands of customers for car insurance plans they didn't ask for, resulting in tens of thousands having their cars repossessed. 

* Signing up customers for Prudential insurance products without their knowledge or consent. 

* Making modification to loan terms without customers' knowledge or consent. 

* Violating ERISA by pushing clients to roll their 401(k) plans into more expensive IRAs that were bad for the customer but good for Wells Fargo.    

* Most recently, charging hundreds of thousands of customers for add-on products like pet insurance that they neither asked for nor needed. 

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