Wells Fargo Executives Embarrassed by Employee Incompetence?

Poor Wells Fargo. It must be really distressing to CEO John Stumpf that his mortgage division is being called on the carpet yet again.

Big Banks’ Mortgage Units — Still Failing Customers — Face New Restrictions
On Wednesday, the OCC announced that six banks that manage home loans — EverBank, HSBC, JPMorgan Chase, Santander Bank, U.S. Bank and Wells Fargo — haven’t implemented all the reforms they promised to make as part of the 2011 deals.

As punishment, the regulator has imposed new restrictions on the banks’ mortgage departments, limiting their ability to acquire residential servicing rights in some circumstances, and forcing them to seek OCC approval before hiring senior officers in their mortgage servicing and compliance departments.

The restrictions vary, with Wells Fargo and HSBC strictly prohibited from certain types of new business acquisition, while the other banks must first seek OCC approval.

Let’s face it, things must be very obviously bad if the Office of the Comptroller of the Currency has finally taken its head out of the sand and noticed something was wrong with the way Wells and the other big financial institutions deal with consumer requests for mortgage loan modifications in the wake of a past “enforcement action” and a so-called punitive settlement that set servicing guidelines for the banks.

One of the many issues cited when the OCC sanctioned Wells and others last week was the ongoing inability of the bank to assign each loan mod review to a single, knowledgeable employee tasked with, among other things, keeping the consumer informed throughout the process.

Wells Fargo, the OCC said in a new consent order, “continues to engage in unsafe and unsound practices.” Among the bank’s points of “noncompliance,” the regulator said in regulator-speak, is its failure to ensure “effective communication with borrowers, both oral and written.”

According to the OCC, Wells Fargo still has yet to ensure that each borrower is matched with a single customer service representative at the bank to handle their modification request or foreclosure — a basic first step to ending the cycle of confusion, lost paperwork and endless hours on the phone that many homeowners have endured while speaking with a succession of uninformed bank employees.

Mike Heid, the president of Wells Fargo Home Mortgage, said in a statement that the bank has “implemented significant changes to our mortgage servicing operations and achieved compliance with major elements of the original Consent Order.”

I would imagine Stumpf and Heid must just be beside themselves with shame and distress because none of the many hundreds of company executives is intelligent enough to set up a system to assign cases to the employees trained and empowered to manage them. You’d think the nation’s largest mortgage bank and second-largest mortgage servicer could afford to hire somebody to help with that.

How embarrassing for Heid and other WFHM executives who have been telling no less an auspicious audience than the U.S. Congress since April 2010 that the company is diligently working on creating what has become known as a “single point of contact” system. How distressing that the no-doubt earnest testimony of those well-paid men was made into lies by the base incompetence of those idiot employees who, after years and years of being paid salaries still can’t manage to create a database and develop a protocol for working with consumers.

More than five years later, they have to hang their heads in shame that they can’t manage to do what countless private and government organizations do every day – assign clients, patients, students, etc., to a contact person they can count on to help them through a bureaucratic process.

Back when I worked in a tiny academic advising office at a small university, we somehow managed to create and administer a system that could divvy up the students among trained advisors, maintain an electronic database to record  every communication we had with those students, and track their academic progress and choice of major. Little did I know back then that we lowly functionaries were geniuses compared to the high-dollar executives at the nation’s fourth-largest bank.

While I was trying to work with Wells Fargo to restructure my loan, I experienced the terrible incompetence of its system firsthand. Over two and a half years, I was assigned no fewer than 17 people who were supposed to help get my case reviewed. Oddly enough, most of them weren’t very helpful at all. Some of them even seemed to completely lack such basic skills as how to read a bank statement, how to add simple numbers and how to return phone calls.

One wonders how the very same company has managed to keep the paperwork straight and organize all the steps required to facilitate the hundreds of thousands of foreclosures it has committed over the past few years. Of course, we now know there was a special manual created to help Wells Fargo employees fabricate the reams of documents necessary to achieve this profitable outcome.

Perhaps Stumpf and Heid could hire the same people who wrote the Foreclosure Manual to create a Loan Mod Manual. Wouldn’t that be helpful? I wonder why none of their expensive executives thought of that?

Throw the Bum/Comptroller Out

The so-called federal regulators are still aiding and abetting the big fraud-factory banks to hide their shady foreclosure procedures, both past and ongoing. And the lying, cheating and stealing goes on and on.

From the North Dallas Gazette article What we don’t know about foreclosure practices may still hurt us:

“A recent study of the Independent Foreclosure Review (IFR) process by the Government Accountability Office (GAO) cited significant flaws, including a lack of transparency, in the design and implementation of the process. The IFR process was created in 2011 because several mortgage servicing companies and their affiliates were found to have regularly engaged in questionable, unsafe, and even illegal practices.”

 Yes, in my case Wells Fargo, servicer of my misbegotten mortgage loan, absolutely engaged in questionable, unethical, immoral, unprofessional and what I certainly consider to be illegal practices. And I’m hardly alone. The big banks’ loan mod and foreclosure practices – such as lying to homeowners and playing all kinds of games to manipulate them into the giant sinkhole known as the “foreclosure track” – appear blatantly illegal to any average, common-sense person.

Unfortunately, hardly anyone who could do anything about it considers what the banksters do is illegal. That includes the legion of legislators who get big campaign donations from the financial industry, as well as a whole lot of judges and about all the states’ attorneys general. And, of course, the completely impotent Office of the Comptroller of the Currency, which is tasked with supervising banks to “ensure that they operate in a safe and sound manner and in compliance with laws requiring fair treatment of their customers and fair access to credit and financial products.”

 Despite the GAO’s conclusions, however, the Fed and the OCC have decided to double down on the secrecy surrounding the process: refusing requests by Senator Elizabeth Warren (D-MA) and Representative Elijah Cummings (D-MD) for information about the IFR process, and about specific violations of law—including wrongful foreclosures, excessive fees, and fraudulent affidavits filed in court.

So, what next? I don’t think Sen. Warren will back down. In fact, maybe she  should call on President Obama to replace the current Comptroller with someone who isn’t so obviously in bed with the banksters. He has the power to do that, according to the OCC’s own website:

“The OCC was established in 1863 as an independent bureau of the U.S. Department of the Treasury. The President, with the advice and consent of the U.S. Senate, appoints the Comptroller to head the agency for a five-year term.”

Maybe the Senate should look out for the American people and retract their consent for the appointment of the incumbent. Maybe the President should take some action that actually helps beleaguered homeowners instead of making speeches that offer hope and help and justice that never actually materializes.

Throw the bum out! That might also put the FDIC back on the side of the consumer, as well, because the Comptroller also heads that agency. (No wonder it’s giving the banks a bye, as well.)


Give ’em Hell, Elizabeth Warren!

Sometimes it seems like Sen. Elizabeth Warren is the only person in any power position in this entire country who understands and has a problem with what the big banks have done to utterly and completely screw millions of American homeowners.

It’s no surprise to those who have been fighting off the banks’ foreclosure feeding frenzy that regulators, including the Office of the Comptroller of the Currency, is squarely on the side of the banks.

Another Foreclosure Settlement Farce?

So, the powers that be have decided the Independent Foreclosure Review being carried out by the Office of the Comptroller of the Currency and the Federal Reserve wasn’t working out and wouldn’t have helped many homeowners anyway.

Instead, we got yet another settlement that is supposed to provide billions of dollars to homeowners whose homes were wrongfully taken in shady foreclosure actions and to those still deluded into thinking their loan servicers will modify their loans.

The 10 banks are supposed to pay $3.3 billion to 3.8 million borrowers whose homes were in foreclosure in 2009 and 2010. And they are required to provide $5.2 billion in other assistance, like loan modifications and forgiveness of deficiency judgments.

The headlines sound great, don’t they?

Banks to pay $8.5 billion in foreclosure settlement

Trouble is, instead of the regulators reviewing each case and assigning compensation to those most harmed by the banks, now the banks get to decide how the money is distributed.THE BANKS! Yes, it appears this is just the latest in a long line of settlements that say homeowners are supposed to get real financial help fighting foreclosure and foreclosure fraud, but that lets the banks get away with business as usual.

Somehow, in these big settlements, the money doesn’t seem to actually find its way to those homeowners and the banks don’t mend their wicked ways.

Take, for example, back in February 2012 similar headlines touted a $25 billion settlement reached between the five largest banks and the attorneys general of 49 states. The settlement supposedly provided $17 billion for principal reductions and loan modifications and $2.5 billion for states to help their homeowners fight foreclosure. Too bad the vast majority of mortgages (those involving Freddie Mac and Fannie Mae) were excluded from receiving principal reductions and several of the states re-allocated their money to shore up their budgets without providing any foreclosure relief at all.

In addition, the AG settlement also supposedly required the banks to follow certain rules when working with homeowners facing foreclosure. As far as I can tell, these were just words on paper. For example, the terms of the settlement specifically prohibit banks from using robo-signers to create  foreclosure documents. I’m pretty sure there are already laws against forging legal documents, laws the banks had been skirting without penalty for years – even during the AG settlement talks.

Now here we are, a year later, and the banks are once again paying up for continuing to flout the law and the previous agreement. It doesn’t take a genius to see it will take more than billions of dollars to prod bank executives into behaving. They seem to believe they are above laws, rules, ethics, even basic professional behavior.

Take, for example, another of the AG settlement’s impotent rules: one that  prohibits banks from foreclosing on a homeowner who is working through the mortgage loan modification process. Well, the government’s HAMP program guidelines, put in place in early 2009 and clarified in 2010, stated that same prohibition. But the banks have been ignoring HAMP and dual-tracking foreclosures for years.

My personal favorite of the AG settlement rules – and something banks have been saying they’re doing for years now – is the so-called “single point of contact.” As far as I can tell from commenters on this blog and my Twitter feed, homeowners seeking mortgage mods are still getting the run-around from all the big banks.

Anyone want to place any bets about how much of the $5.2 billion in the new settlement will fund loan mods that will actually keep people in their homes. (Seems the AG settlement mostly covered the banks’ losses in short sales, which left homeowners out on the street as surely as a foreclosure would.) Or how many people wrongly foreclosed on will get any meaningful compensation from the same banks that screwed them in the first place?

Oh well. It’s not as if the Independent Foreclosure Review was that independent, anyway, seeing as it was basically being carried out by the banks themselves.

When will someone in power realize that sending the fox into the hen house to count the eggs is just plain stupid?

Update 1/10: Tellin’ it like it is …
Pending Foreclosure Fraud Settlement Achieves New Level of Abject Regulatory Failure