Wells Fargo settles remaining ‘robo-signing’ mortgage litigation
Wells Fargo & Co. has agreed to spend $67 million on mortgage-related issues to settle remaining civil litigation stemming from the so-called robo-signing debacle.
Under the terms released Friday, the San Francisco bank will use the money on down-payment assistance, counseling for troubled homeowners and unifying the customer-service systems that several of its home-lending arms had employed.
The settlement puts to rest several combined lawsuits accusing Wells Fargo executives of betraying shareholders by allowing abuses of the foreclosure process to occur, including the signing of sworn affidavits by employees who had no knowledge that the facts in the documents were true.
The bank, which didn’t admit wrongdoing, said: “Wells Fargo and its directors are pleased to have resolved this matter. We remain committed to our efforts to assist borrowers facing financial challenges.”
A bank spokesman said the seven shareholder lawsuits combined in the U.S. District Court in San Francisco were the last pieces of litigation accusing Wells Fargo of mishandling loan-modification efforts and foreclosures as the bank was flooded with defaults during the housing bust.
In a related $25-billion national mortgage settlement in 2012, Wells Fargo and four other financial institutions agreed to reform their home-loan customer service practices, pay $5 billion in fines and deliver assistance valued at $20 billion to troubled borrowers.
Friday’s settlement requires Wells Fargo to:
•Provide $36.5 million in down-payment assistance to home buyers in certain areas hit hard by the financial crisis: California’s Central Valley; Detroit; St. Louis; Albuquerque; Virginia Beach, Va.; and New Haven, Conn.
•Provide $6 million in free counseling to Wells Fargo customers having trouble paying their home loans.
•Create more consistent handling of borrowers by integrating the servicing operations of two Wells Fargo units and two lending operations acquired by Wells. The bank estimated the cost of that to be $24.5 million.
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