Wells Fargo Picks to Pay
by Jake Bernstein ProPublica
On Friday, Wells Fargo disclosed that it had agreed to pay $590 million to settle class-action lawsuits [1] brought by investors concerning bonds sold by Wachovia, which Wells Fargo acquired in October 2008.
Among the claims in the suits: That Wachovia misrepresented the quality of a mortgage portfolio it bought from Golden West Financial, a California-based savings and loan. The founders and chief executives of Golden West were Herb and Marion Sandler. Herb Sandler is ProPublica’s board chairman and the Sandler Foundation is ProPublica’s founding and largest donor. The Sandlers are not accused of wrongdoing or named as defendants in the suit.
In a statement emailed to reporters, a Wells Fargo spokeswoman said the settlement did not constitute an admission of liability or any violation of law by Wachovia.
“Wells Fargo agreed to this settlement in order to avoid the distraction, risk and expense of on-going litigation,” she said.
Accounting firm KMPG LLP, in a separate settlement, agreed to pay $37 million to the investor class to settle claims arising from its role as Wachovia’s accountant.
The settlement will go to pension funds and individual investors that bought bonds offered between July 26, 2006 and May 29, 2008. The named plaintiffs include the Southeastern Pennsylvania Transportation Authority, the Louisiana Sheriffs’ Pension and Relief Fund, the Hawaii Sheet Metal Workers Pension Fund and the Orange County Retirement System in California. The bonds had a total face value of more than $35 billion.
The three class-actions, which were consolidated into a single case, did not claim that Wachovia had engaged in fraud. Instead, investors alleged that Wachovia failed to disclose the true quality of its bonds and the bank’s financial health at the time of the purchases. In particular, the lawsuit focuses on a $120 billion portfolio of loans Wachovia purchased from Golden West, an $8 billion portfolio of collateralized debt obligations, and $15 billion of “goodwill” Wachovia recorded on its balance sheet from the Golden West acquisition.
In order to establish that Wachovia should have known that what it was selling was impaired, the consolidated complaint [2], filed in federal court in Manhattan, marshaled more than 50 unnamed former employees of Golden West and Wachovia. Their statements, sprinkled through the complaint, paint a graphic picture of a precipitous drop in standards that coincided with the peak of the housing bubble.
The suit focused heavily on so-called “Option ARMs,” an adjustable rate mortgage product marketed by Golden West and then Wachovia under the brand “Pick-A-Pay,” which allowed borrowers to defer payments on their loans. If the borrower failed to pay the interest, it was added to the principal. The lawsuit alleges that by 2006, Golden West’s underwriting standards had declined. Many of the borrowers who purchased Pick-A-Pay loans did not meet income and other qualifications, the suit contends.
The Sandlers declined to comment on the allegations in the complaint.
Once Wachovia purchased Golden West for $24.3 billion, it rapidly grew the Pick-A-Pay program, the lawsuit said. The Golden West sale was announced in May 2006 and closed that October. In 2007, Wachovia extended an additional $33.4 billion of these loans. As part of this push for growth, Wachovia even marketed loans to borrowers that Golden West had rejected.
In January 2009, upon acquiring Wachovia for $12.7 billion, Wells Fargo declared $59.8 billion of the bank’s Pick-A-Pay portfolio credit impaired and wrote down $25.5 billion of it. It isn’t clear how much of the decline in value was due to the alleged faulty underwriting and how much to the general collapse of the U.S. housing market.
The settlement, the result of a three-year legal battle, is among the largest to date for a class-action lawsuit over the sale of securities in the run-up to the financial crisis. The plaintiffs’ attorneys will divide up to $103 million in fees and litigation expenses up to $1.8 million.
In regulatory filings, Wells Fargo stated that the payout, which must be approved by a judge, will “not have a material adverse effect on [the bank’s] consolidated financial position.”
Class-action attorneys vow more such legal actions are to come against other financial institutions. “This is potentially the tip of the iceberg with respect to the credit crisis generally,” said Darren Robbins, one of the attorneys involved in the case.
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4closureFraud.org
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Settlement in Class-Action Suit Against Wells Fargo
Amended Class-Action Complaint Against Wells Fargo
Here is the URL for ALEC that I forgot to include in the above for expose’
http://www.justice.org/cps/rde/xchg/justice/hs.xsl/15044.htm
More on “ALEC” American Legislative Exchange Council, that Noel Poe mentioned above – this is an expose of ALEC here to beware the corporate influence we are fighting against and why grassroots legislative correction is the Power of We The People most effective to deal with things at arms length and beyond are grip in contrast to those we can reach out at home and touch in a pro-active in their face way to change the status quo, that requires attendance at town hall meetings when the common council is open for discussions and voting upon what is on the table. We set the table and they can consume the food for thought.
Yes there are a plethora of laws and many outdated and most not enforced, but without the law on the books there can not be any corrective enforcement.
Yes there are other groups, such as an attorney group organized since about 1900 which keep annual journals that are in Law Libraries, like Indiana University, Indianapolis, that in the first journal explain the agenda of the group proposing model legislation. Some reasons stated are reasonable and other reasons are suspicious at best. Sorry I do not remember right now what the name of this attorney group is for the set of annual journals of this group proposing model legislation for adoption as is or as amended by the respective jurisdictions nationwide. One sensible reason in some respects, but something to always be wary when seemingly reasonable is the agenda of making model legislation available, such as Anderson On Uniform Commercial Code” is for a uniform basis of law, which has impact on everyone more today than ever before as you cross over jurisdiction lines and become subject to the law there that if so different, you, as you are speeding around, violate a law in ignorance due to lack of uniformity nationwide. I have seen these model acts adopted word for word several times and I have also seen model acts amended by a jurisdiction which may have little resemblance to the model act as that jurisdiction customizes things as diligent and thoughtful legislators, so that the act suits their ideals and circumstances in particular and not as, a one size fits all, that should be worn, although it does not fit, just to go along with the crowd of puppets enslaved by carelessness.
Another sensible reason for model acts is that every attorney would know what the law is to best represent you even if not in your county or state and could advise you without a lot of research costs and hours billed to properly advise you.
Another sensible reason for model acts is supposedly you have the experts and best minds making the model legislation that justifies the expense of gathering together to hammer out the expression which in the long run saves every jurisdiction attorney fees locally and speeds up the legislative process which can be more economically productive and practical as a cost saving measure to reduce costs of government and reduce the budget.
Michael @ The “MIXED WAR” Room and The Trials of Life
Forgot to post the URL on ALEC
http://www.justice.org/cps/rde/xchg/justice/hs.xsl/15044.htm
if posters can put their drama & gibberish aside for two seconds this looks like an issue that could use some more prodding. billed as one of the country’s foremost independent investigative news sources, it is very troubling to know that their board members may have their hands dirty in the financial crisis! i wonder who could independently investigate propublica?
I know I am not very trusting. It has seemed to me that the big banks could make good by sending in civil action law suit attorneys to make pennies on the dollar to settle and make it so the people that join the class action can not suit them later. I hear of class action law suits giving 19.00 and maybe as much as 30.00 maybe that figure is to high to each person signed up for the civil suit. the attorneys make good money and the banks get a good deal settiling with so many people, giving up their rights to do anything more to the bank, the banks paying out pennies on the dollar they stole. I only believe people that do not want to do anything should join these, When they are won the people that do want to persue it can and they have case law to help them win. It is a no win for the party joining, except to make a statement and help justice. Possibly saving their home by so much happening that the luck out with Law suits like Rob McKennas against RECONTRUST , THAT is asking for an injunction against their foreclosures and to ban them from the state of WA . and to give the illegal foreclosed homes back to the homeowner. Pretty crazy stuff is happening these days. It should never have come to any of this if our government regulators had done their job. The people have a breach of contract and misrepresentation breach on the Honest Services doctrine agaist our regulators. Which leads to ‘RICO’ Our government officials are not immune to these laws. I am not an attorney, this is what I believe. Look up the elements of Honest Service Doctrine: Wikepedia. Sure sounds like the people have cases against our government officials that have misrepresented the people. concealed the facts and caused economic harm to us.
For the Emergency that Exists:
Whereas Banks have caused and are not being held responsible for crimes and civil offenses committed in the orchestration of the events resulting in an economic crisis of worldwide consequence during the first decade of the 2000 Millenium and to the present date of this declared and ever present and apparent emergency in the real estate market exacerbates the wounds and suffering inflicted in the aftermath of greed and evil devices designed to fail and unjustly enrich the miscreant banksters; and
Whereas, by means of Foreclosure and bids made at Sheriff Sales, banks have acquired Deeds to real property within this community; and
Whereas, thereafter banks have allowed bank owned realty and or such property interest to remain unsold and vacant after causing children to become homeless; and
Whereas, such vacant unsold realty is a blight on the community and neighborhoods; and
Whereas, the above and foregoing has resulted in a decrease in property values and tax revenue, so long as these eye sores remain neglected –
We The People of Indiana, request that the Common Council of each City and the Board of Commissioners of each County in the State of Indiana set for the agenda: public hearings on the proposed legislation as follows:
That it be enacted after public debate and amendment as needed to increase and or improve the scope and strict applicability of this proposed legislation, that the respective jurisdictions have the authority to require: all banks having an interest or title and claim of ownership in properties within the jurisdiction of the city and or state as the case may be, be forthwith mandated to enter into a Registry each such property, stating the common address thereof, so that a common resource of public record be maintained for access by all to examine, so that any code violations as presently apply may be complained and citations issued with particularity and specific details of the offense.
That it be enacted that this legislation, strictly applicable only to bank owned properties and mortgagees in possession of properties abandoned or vacated by mortgagors/owners, be subject to the following fines and penalties for non payment of fines and forfeiture as follows:
For each violation for which a citation is issued, the fine of $5,000.00 is to be incurred each day that the violation remains and is not corrected within 24 hours of Notice to the Bank.
Each Bank must maintain a current address and phone number and email and contact person on file with the registry and the name of the address, phone number and name of vendor contracted to maintain the property.
Each property is subject to forfeiture if any fine and penalties remain unpaid and not satisfied within 21 days of Notice of the citation and amount due for each violation for each day the violation exists as cited.
That each jurisdiction shall proceed to apply to the Court for a lien upon which forfeiture of title to bank owned property shall be transferred for failure to maintain and have the property occupied.
That inasmuch as bank real estate owned property is purchased subject to all existing rights of tenants and owners to occupy the property pursuant to Law, the bank shall provide to the Registry, the name of the occupant and the terms of the tenancy, including the type of tenancy and if a lease period exists that the owner or tenant has a right to enjoy in accordance with Indiana Code 32-31-6 and Protecting Tenants At Foreclosure Act of the United States Congress, inasmuch as Indiana Code: 32-31-___-___ and PTAF provides as follows:
A minimum of three months right of a tenant to occupy the property after the date of the sheriff sale and a longer period of time in accordance with the lease between the landlord/owner of record pursuant to PTAF and if owner occupied and the property taxes are paid current, such owner/occupant pursuant to IC 32-31-___-___ shall have the right to occupy the property for three months if the property is less than 15 acres and if more than 15 acres for ___ months.
Any bank, as principle in relationship with Vendor/Agent, as a matter of public record of the Registry (for all to have the right and duty of public office and employment to inspect and confirm claims as may be filed by victims and take cognizance of the right of tenancy or occupancy by mortgagor/owner), which causes any occupant/tenant to be subject to arrest for trespass or commits any lockout or trashout or wrongful eviction, not having standing of ownership on record in the Office of Recorder that shall upon presentment of the original and true mortgage wet ink signature documentation of mortgage and note and any assignment documents and affixed allonges as to the sufficiency thereof, prior to sheriff sale or ownership thereafter, shall be subject to forfeiture of all interest whatsoever in the property upon the filing of a complaint by the victim of false arrest for trespass under color of law or that has been locked out or suffered a trashout or been wrongfully evicted and or had services disconnected by action of the Principle/Agent and the title to the property shall become divested to the tenant/occupant and or the community having jurisdiction.
All Notices required by Indiana Code 32-31-___-____ shall be placed into evidence in the Registry as shall in accordance with said statutory authority be required to be delivered to Tenants/Occupants and Mortgagor/Owners. Any and all Orders for Eviction must also be placed into the Registry for law enforcement cognizance and public right of access to such public records.
All Notices required by Indiana Code 32-31-6-___ shall be placed into evidence in the Registry as shall in accordance with said statutory authority be required to be delivered to Tenants/Occupants and Mortgage/Owner as concerns that Court Ordered Abandonment of personality thereof as located on the property and required to be removed by the bank in accordance with IC-32-6-___ to a storage facility for retrieval by the tenant/owner of such personality that is exempt property without expense and all right to obtain or pickup non exempt property upon payment of storage costs incurred for storage fees.
The bank shall file in the Registry evidence of Notice to the Tenant/Occupant and or Mortgagor/Owner the following Notice of Rights under authority of Tenant and or Mortgagor/Owner to occupy the property after sheriff sale as provided in IC 32-31-___-___ and PTAF and the bank shall incur a mandatory fine for failure to deliver such notice and file such notice in the amount of $5,000.00 for each property entered in the Registry.
The bank shall pay to the Recorder the filing fee of $500.00 for each document required hereby to be filed with the Recorder.
Each jurisdiction may, as need arise and or shall accept complaints from any individual so inclined to file notice of offense in the Registry without fee and need not in this manner employ at public expense any enforcement of the provisions of this legislation that in such manner if sufficient public participation and private action is conducted avoid hiring any additional inspectors at public expense, so long as it is apparent from the data base open to the public of the Registry, that each bank owned property is under scrutiny by an adjoining property owner and diligently inspected each day and citations issued for apparent code violations otherwise by those passing by in observance.
Employment for purpose of inspection and citation of code violations is to be with first priority to the employment of victims of foreclosure and those displaced or homeless as a result of foreclosure and same shall in addition to minimum wage and reimbursement for travel expenses incurred, be provided incentive pay upon the merit basis and in the amount of 10% of the fine incurred for each violation such employee or individual not so employed has filed in the Registry for citation, payable weekly on Friday by Noon on each date that payment is due upon payment made by the bank if the bank is delinquent to pay then the amount shall increase to 20% as an incentive for public officials to take action forthwith to collect from the banks and file liens and obtain forfeiture, and this 20% shall then be paid within five calendar days upon issue of deed by Order of the Court.
The bank may appeal to the Common Council or to the Board of Commissioners, as case may be had for appeal, but only upon the presentment by the bank with the application made for appeal, each and every document hereby mandated for proof of standing, be on file in the Registry, especially if MERS has at any time appeared as an entity in any documentation associated with the realty/property.
That an application for forfeiture with the Court shall each day be commenced by the Recorder and Treasurer and Auditor, filing same on any date that the sum of fines unpaid amount to 20% of the value of the property upon which citations are not paid and if the citations increase thereafter to 50% of the value of the property, as maintained for valuation of property for taxation, then any and all property of record in which the bank has an interest of record shall be also subject to forfeiture as located within the jurisdiction of the city and or county.
Help me learn how to post this as a new post rather than just a comment here so that everyone sees it and can comment and take action.
574.804.0006
mlfwf@yahoo.com
Michael @ The “MIXED WAR” Room and The Trials of Life organizing the Relentless Resistance Renascence Rant, Rank 1 and spawning ….
4closurefraud doesn’t usually post other people’s stories. and honestly, if there’s one thing this site gets enough of, it’s preening wonks that think writing up their own phony anti-foreclosure legislation is worth wasting anyone’s time over. newsflash, bucko: there are already countless laws in place to protect people from the scheme and no one has any interest in enforcing them. organize direct action in your community to stand up against it physically & then you can worry about somehow independently writing and pass laws you’ve made up. unless you’re with ALEC, i suppose.
I have read and appreciate several stories by others posted here exposing the injury by these Banksters lack of oversight.
Sorry that in the haste to put this up here I left out the explanation that this is only a draft and only a proposal for legislation that local communities have the power to evoke for We The People as We The People present this to each legislative body jurisdiction..
My apologies for this defect.