Wells Fargo (NYSE: WFC) Claims Responsibility For Errors On Foreclosure Paperwork

October 25th, 2010 | by Heather Munoz |

In a recent announcement representatives of Wells Fargo (NYSE: WFC) admitted that the company made serious mistakes in the paperwork filed for thousands of foreclosures cases. The company further stated that it would do everything possible to correct the problems.

The Des Moines-based mortgage unit for the big bank planned to re-file documents for 55,000 individual cases by the middle of November. At the same time, the company noted that not every one of those posted cases contained errors, but no one listed how many did.

Representatives have stated that the mistakes on the foreclosure forms were purely technical in nature. For instance, there were several problems that occurred during the final review of foreclosure affidavits and notarizations. In these cases, the documents did not fulfill the strict guidelines required by current procedures.

Wells Fargo has said it wishes to submit supplemental affidavits to replace those that were incorrectly issued.

This event has not affected Wells Fargo’s plans to maintain foreclosure processing. It did not join other major banks like Ally Financial’s GMAC and Bank of America in suspending foreclosure filings.

Teri Schrettenbrunner, a Wells Fargo spokeswoman had the following to say: “We don’t believe that there are instances in which the foreclosures would not have occurred otherwise.”

The foreclosure documents will be re-filed in a total of twenty-three states, including Iowa, where a judge must approve all foreclosures.

Wells Fargo CEO John Stumpf said that he was confident his company’s current practices, procedures and documentation were correct in a conference call with certain investors.

According to depositions given by two Wells Fargo employees, there are reasons to question the company’s foreclosure practices. One employee, working in Fort Mill, South Carolina gave testimony back in March that she had signed upwards of 300 to 500 foreclosures on a daily basis. Another employee stated that he had personally verified only dates on around 150 documents he signed each day. He relied on the help of co-workers in order to verify the information was accurate.

As a consequence of these depositions, the attorney generals in all fifty states have began joint investigates into Wells Fargo’s practices. Both the paperwork and the legal procedures are being evaluated to determine whether they were handled appropriately in thousands of cases. The attorneys generals are planning to meet lenders regarding the probe. Loan servicers were also contacted as well in conference call settings. Iowa’s own attorney general, Tom Miller is heading the multi-state probe.

A spokesman for Miller, Geoff Greenwood, was able to confirm certain meeting dates but was unable to comment on the identities of the banks expected to show up. He also stated that Miller’s office was currently examining Wells Fargo’s disclosure information.

Greenwood added, “We will initiate communication with Wells Fargo, just as we have with other companies that have disclosed flaws in their foreclosure process.”

The company has completed over 500,000 mortgage loan modifications (556,868 to be exact). This figure included $3.5 billion in principal forgiveness. Additionally, Wells Fargo has refinanced almost 1.9 million mortgage loans since January of 2009.

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