Wells Fargo fined a record $85M over mortgage practices Real Estate Agent

Wells Fargo fined a record $85M over mortgage practices

Posted by Natasha Everingham | Posted in Real Estate Agent | Posted on 20-07-2011

Tags: Record, Wells Fargo

0

Wells Fargo has been fined a record-setting $85 million by the federal government.

The penalty is the largest ever assessed by the Federal Reserve in connection with consumer-protection rules.

The Fed alleges Wells Fargo (NYSE: WFC) subsidiary Wells Fargo Financial, which is no longer in business, steered prime mortgage borrowers into higher-cost subprime loans, which resulted in higher costs for the borrower.

The bank also is accused of falsifying some borrowers’ documents so they would qualify for loans they would not have qualified for based on their true incomes, the Fed says.

While the $85 million fine is a lot of money, it represents only 2.2 percent of the $3.9 billion in profits the company had in the second quarter.

The bank is based in San Francisco, but it has large regional operations in Minneapolis.

> to read complete coverage of the

The penalty is the largest ever assessed by the Federal Reserve in connection with consumer-protection rules.

The bank also is accused of falsifying some borrowers’ documents so they would qualify for loans they would not have qualified for based on their true incomes, the Fed says.

While the $85 million fine is a lot of money, it represents only 2.2 percent of the $3.9 billion in profits the company had in the second quarter.

The bank is based in San Francisco, but it has large regional operations in Minneapolis.

> to read complete coverage of the Wells Fargo announcement as reported by Adam O’Daniel at the Charlotte Business Journal, one of our sister publications.