
Wells Fargo Is Accused of Making Improper Changes to Mortgages - frgtpsswrdlame
https://www.nytimes.com/2017/06/14/business/wells-fargo-loan-mortgage.html
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maxxxxx
The financial crisis of 2008 really shattered my world view. Until then I
thought there was a free market where the companies that do good business
survive. Since then you almost hear every week how banks do stuff that would
have killed pretty much any other company but banks get away with it. This is
just unbelievable.

~~~
JumpCrisscross
Most people don't price check banking like they do _e.g._ groceries or mobile-
phone plans. This is why Chase can pay a pittance of interest and charge for
using others' ATMs while _e.g._ Ally pays 10 to 60 basis points on their
_checking account_ [1] while re-imbursing the ATM fees other ATM providers
assess.

[1] [https://www.ally.com/bank/interest-checking-
account/](https://www.ally.com/bank/interest-checking-account/)

~~~
toomuchtodo
I needed a check from Discover Bank (online savings, similar to Ally) to pay
my old outsourcing HR company back for a 401k loan. Discover Bank sent me an
"official check" (which takes ~8 days to arrive from issuance), which
(according to the FDIC consumer protection laws [1]) is identical to a
cashier's check, but the outsourcing HR company would not accept an "official"
check, only certified/cashiers.

Had I banked at Chase, they would've provided me an actual "cashier's check"
in branch at a moment's notice.

Is it worth ~$200/year in interest to not be able to get to your savings at a
moment's notice? Before, I would've said yes. Now that its cost me an $1800
IRS penalty, no longer.

[1]
[https://www.fdic.gov/regulations/laws/rules/6500-3222.html](https://www.fdic.gov/regulations/laws/rules/6500-3222.html)

~~~
creepydata
Did you appeal the penality with the IRS?

This kind of thing doesn't normally happen, or shouldn't.

You should have a local bank account for the times you need local branch if
you do most of your banking online.

If you're going to spend quite a bit of money soon, like within a month or so,
you should move that money into a local branch beforehand, like I did when I
was buying my house and I knew I'd need the funds on closing date.

Even if you fail to do that ahead of time you can wire the money for, maybe,
$20 to the local bank, wire transfers are instant, and get the cashier's check
there.

That's like saying "you shouldn't use brokerage accounts cause if you need the
money you'd have to wait for the sale to settle before you can access your
funds."

~~~
toomuchtodo
I was between jobs, my child was sick, and my dog was dying. I agree I
could've solved the problem by starting the process immediately when I
separated from my last employer. Life happens.

I have documentation to show I made a best effort attempt to repay the loan in
time (official check, fedex tracking numbers, etc), but I won't know if its
good enough until I file next year's tax returns and challenge the 401k
provider's 1099-R.

~~~
sedachv
creepydata suggested that you should appeal to the IRS. There is an appeal
process. Talk to your accountant about doing that.

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delinka
I have trust issues with banks, and even my credit union. I verify their
interest calculations. I monitor payment amounts. I challenge _every_ _single_
_incorrect_ "NSF fee" (it's a small-town bank, and this has happened several
times.)

In a situation like in the article, continue paying the original, higher,
correct loan payment. Make sure that the 'extra' (and indeed, any extra you
intentionally pay any other time) goes toward the principal balance and not
into your property tax escrow account. You've got to watch any bank you do
business with, even to correct their honest mistakes. If your payment changes,
find out why. If your extra principal payments aren't applied correctly, get
it fixed. And when you have evidence of a pattern of wrongdoing, get the law
involved.

~~~
TallGuyShort
>> And when you have evidence of a pattern of wrongdoing, get the law
involved.

Where do you go exactly? I left Wells Fargo because (among similar "errors"),
the charged me $15 monthly for "Fees" which they would reverse when I asked
them what the fee was for. I had documentation of them insisting it was just a
one-time mistake for several consecutive months and then charging the fees
again every month for months. But who's going to investigate Wells Fargo over
a $15 "mistake" that they fix as soon as you ask them to?

~~~
sdenton4
This is what class action suit are for. Multiply $15 by a hundred thousand
affected customers for a year, and you've got some serious cash. The same
reason Fargo is down to do this is the same reason it's a good target for a
class action: there's actually a lot of money there.

~~~
mcherm
Wells Fargo customers cannot file a class action suit because they have agreed
to binding arbitration (with individual action only).

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BlackjackCF
I'm not surprised. I might be misremembering, but I'm pretty sure Wells Fargo
was also the bank where its employees were opening up bank accounts without
their customers' knowledge for bonuses. Oh, and it's also one of the banks
where whistleblowers were basically pressured into leaving and then
blacklisted on a list that big banks circulate internally so they couldn't
find jobs in the banking industry ever again.

~~~
iagreeentirely
Please don't take this as a comment against you specifically.

I am incredibly saddened by the fact that this association is weak enough that
people could even entertain the idea that they are misremembering.

Wells Fargo should be forever branded, and if you are doing business with them
you really should stop.

~~~
creepydata
Not so simple. My mortgage was sold to Wells Fargo without my input. I don't
want to refinance because it wouldn't make sense financially as well as it
could just be sold right back to Wells Fargo.

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dmalvarado
Stories like this really go to show that no matter how much PR a bad company
uses to try to regain good will, they are still rotten and are still actively
trying to screw you. Wells Fargo, Walmart, Uber, TimeWarner/Spectrum, etc..
all bad to the core.

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Simulacra
Banks seem to be insulated these days like the Oligarchs after the fall of the
Soviet Union. They can do no wrong. Even when they're caught, few if any ever
go to jail. What does a bank have to do before the government says "enough"
and starts locking people up?

~~~
arethuza
Worth noting that one of the first things a lot of the Russian oligarchs did
was set up their own banks - alongside their own security and intelligence
services.

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shaftway
I'd appreciate some clarification from someone...

I get that generally changing the terms of a loan after everything is signed
is sketchy. But in this case it looks like they were _trying_ to do the
customers a service:

>The changes, which surprised the customers, typically lowered their monthly
loan payments, which would seem to benefit borrowers, particularly those in
bankruptcy. But deep in the details was this fact: Wells Fargo’s changes would
extend the terms of borrowers’ loans by decades, meaning they would have
monthly payments for far longer and would ultimately owe the bank much more.

I guess the devil is in the details, but if they just lowered the minimum
payment what's the harm to the consumer? AFAIK the vast majority of loans in
the US are simply calculated. If you make your payments as expected on time
you wouldn't be effected. If you aren't able to do that, then of course you're
not paying off the principle as quickly and the term would be extended. Just
like making extra payments will shorten the term.

To be clear: changing the rate? Adding fees? Sure, that's really bad; rake
them over the coals. But if it's just changing the minimum payment amount I'm
missing the problem.

~~~
caseysoftware
Changing the terms of the contract without explicit approval from both sides
is _beyond_ sketchy. At minimum, it's an unapproved amendment and therefore
doesn't apply. At worst, it's a new contact that at least one side didn't
agree to and therefore doesn't apply. It looks like people agreed without
understanding the details.

In this case, I'd wager by lowering the payments, less loans were "risky" and
therefore their assets look better. That probably was for the benefit of
repackaging those "assets" and/or better guarantees from the Fed.

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heisenbit
The frontline employees are typically not authorized to make such changes
alone. This sounds again like too much pressure by management and somewhere in
the chain someone was stepping over the line. The fact that such egregious
missteps have happened now twice (unauthorized account opening) is a very,
very worrying sign for the culture in Wells Fargo. Top management should be
asked some very hard questions and maybe some changes are needed.

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ams6110
I don't know why any individual uses the big national banks for their personal
checking/savings.

Use a local bank or credit union. I've always had much better service and
respect for me as a customer that way.

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cmurf
Wells Fargo is yet another example of big bank that a long time ago should
have been disallowed from buying any more banks. Local banks don't get away
with shady stuff like this because you can go visit a banker in person. There
is no such thing as a "local" Wells Fargo. It has the same customer service
and anonymity as an internet forum.

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megamindbrian
Wells Fargo decided I had to pay a $50 fee for a failed transaction even
though my mortgage was already paid for the month. They refused to remove the
fee even though they could produce a signed transfer of service disclosure.

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pasbesoin
Fraud. Personal culpability. Jail.

The one thing that will put the brakes on such.

P.S. Also worth mentioning, various governments have various laws and
regulations prohibiting doing business with agents convicted of criminal
activity. It would also be worth actually adhering to and enforcing those.

A bigger threat than a fine that often represents a fraction of the profits
already gained.

But seriously, pierce the corporate veil and lock them up. Long past due. And
experience has now shown, the only way to substantially reduce such activity
(e.g. Savings and Loan Scandal of the '80's).

P.P.S. Regarding this, and all the Federal agents/roles that have been
reassigned from domestic and financial crime to "terrorism". More Americans
face greater terror today from the prospect of being screwed over by
fraudulant big business, than face real (as opposed to manufactured) terror
over a terrorist attact. Or, a "terrorist" attack, looking at how broadly that
label gets applied, today. (I was going to say, how broadly it gets "thrown
around", only it isn't really being "thrown around", it's being used quite
deliberately to foster self-serving agendas.)

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swiley
I go quite a bit out of my way to avoid any interactions with banks.

I keep most of my savings in cash and never take out loans. The result: a
blank credit report (which HR at most companies seems to like when I'm getting
hired) and few late penalties, and never being told I can't have access to my
money because of "XYZ." Not to mention, avoiding all the crappy online banking
web GUIs.

~~~
usaphp
Don't you aftraid of losing all of your savings due to a robbery? Also if you
would want to purchase a house in the future how would you make a payment? IRS
won't like a diplomat full of cash in hundreds of thousands of dollars? They
will have questions.

~~~
emjoes1
I second that. Tried using cash as a down payment on a house did not fly even
though I could reconcile the difference in cash with what I kept in the bank
with my pay stubs and deposit/withdrawl records. Underwriters want to see that
cash sitting in a bank account.

~~~
Goronmon
Yeah, if you want to use cash, you basically have to be able to just pay for
the house in it's entirety. With downpayments, the underwriters really want to
make sure you didn't just take out a loan somewhere to finance that
downpayment. Showing up with cash in that instance is basically indicating you
don't want them to know where you got the money, which isn't going to fly when
a person's job is based around playing it safe.

~~~
creepydata
Even so, most businesses aren't going to want to handle a suitcase full of
$200,000+ in cash, unless they are a bank. My lawyer handled all the cash
(cashier's check) in my house buying transaction. My lawyer doesn't own an
armoured car and doesn't have the ability to handle all that cash.

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cbanek
I feel like everyone is being overcharged these days.

From groceries, with cashiers not ringing up specials or coupons correctly,
sometimes the wrong UPC/wrong price and they aren't even paying attention.

Everyone else is trying to charge extra hidden fees, and sometimes they are
illegal, like these.

But honestly, most people are so out of it, so clueless, they don't notice if
they have the paperwork in hand.

Now we've really jumped the shark and are forging people's paperwork (account
scandal) and submitting false documents.

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_jal
Good lord. Assuming this is largely true (and Wells Fargo has lost any
presumption of good faith), people need to start using the word "RICO".

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joncrane
Disclaimer: I work for one of the top 10 banks in the US by assets.

I was shocked, SHOCKED, to find out that our CEO isn't even a tiny bit of a
lying, cheating sociopath. I started working here for the benefits and culture
in the IT department, and assumed that the people responsible for paying for
all the cool stuff we got were doing the same thing I assume all the other big
banks do (Wells, JPMorgan Chase, Citi).

I've only been here a little while, and not seen anything nefarious, though I
only have visibility into the IT infrastructure mostly, and some development
work. But I'm still wondering how a company can become this large and
successful in this sector without griminess from the top.

It's restored my faith in stuff a little bit. Also note, if you look at the
top 10 banks in the USA, the bottom half are a small fraction of the size of
the top 3, and we're in the bottom half.

~~~
tnorthcutt
_our CEO isn 't even a tiny bit of a lying, cheating sociopath_

How would you possibly know?

~~~
antisthenes
And honestly, how is it even relevant? CEO is only one person, who could have
been with a bank for any arbitrarily short period of time.

The rest of management/leadership could still be rotten to the core.

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s73ver
But clearly, what needs to happen is that the protections passed in the wake
of the 2008 financial crisis need to be undone, and the Consumer Financial
Protection Bureau needs to be neutered.

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OliverJones
This bank helped build the American West. It was there before the current
batch of executives arrived. Will it still be there after they leave?
Possibly, if they accept personal responsibility for these problems, pay big
fines, do some time at Club Fed, and get out of banking.

Will they do that? Probably not. After all, no organization in the 21st
century is conceivably more valuable than the people who are lootingxxxxx
running it.

