Wells Fargo Owns Up to Finding Errors in 55,000 Foreclosure Affidavits
By: Carrie Bay
For weeks, Wells Fargo has insisted that it’s not a part of the robo-signing debacle that’s given the industry another black eye, adamantly professing that its foreclosure affidavits are legitimate. That tune has changed with an announcement from the company late Wednesday that it will submit new affidavits for approximately 55,000 foreclosures that are pending in 23 judicial states.
Wells Fargo says it has identified instances where employees did not “strictly adhere” to the required legal procedures in conducting final reviews of the affidavits. The bank also says “some aspects of the notarization process” were not properly executed.
Wells says the issues “do not relate in any way to the quality of the customer and loan data; nor does the company believe that any of these instances led to foreclosures which should not have otherwise occurred.”
The company says it has already begun submitting the supplemental affidavits to the court and expects to complete the process by mid-November.
Wells Fargo reaffirmed that it does not plan to institute a moratorium on foreclosure sales.
“In September 2010, borrowers who have completed foreclosure were on average 16 months delinquent on
their payments,” said Mike Heid, co-president of Wells Fargo Home Mortgage. “When all options have been exhausted, we believe foreclosures should not be delayed.”
Wells Fargo also affirmed in a corporate statement that appropriate documents for loans in foreclosure are assigned in compliance with local laws and investor requirements; legal documents related to securitizations appropriately transferred ownership; and its $1.3 billion reserve continues to represent its best estimate of its repurchase liabilities as of September 30, 2010.
“These matters are not affected by the affidavit issues” uncovered in documentation reviews, the company said.
Eight days ago, the bank’s chairman and CEO John Stumpf assured investors and analysts, “We are confident that our practices, procedures, and documentation for both foreclosures and mortgage securitizations are sound and accurate.”
But after other major servicers, including Bank of America and JPMorgan Chase, began halting foreclosures due to problems with legal paperwork in early October, Wells Fargo said it began taking a closer look at pending foreclosure cases.
Though all the while, the bank maintained that its servicing practices were in compliance with applicable laws and regulations, even after the Financial Times uncovered a March court deposition in which one of Wells Fargo’s loan documentation officers testified that she signed off on as many as 500 foreclosures a day without any personal knowledge of the accuracy of key facts, including how much money borrowers owed the bank.
Wells Fargo says it is continuing its ongoing efforts to monitor and assess its foreclosure affidavit procedures.
“We…want to do everything we can to assure that the procedures we have in place provide Wells Fargo borrowers and others with confidence that foreclosure proceedings we initiate are done appropriately,” Heid said.
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