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  • Mary K. Lenahan, J.D., Realtor

CA Settles with Wells Fargo Over Risky Pick-A-Payment Mortgage Program


Wells Fargo Settles With CA Over Risky Mortgage Plans

CA vs. Wells Fargo Bank

In December 2010, Wells Fargo settled with then Attorney General Edmund G. Brown Jr. on the risky pick-a-payment loans made by World Savings Bank, a subsidiary of Golden West Financial Corp., and Wachovia Bank.

Wachovia purchased World Savings in 2006, and Wells Fargo acquired Wachovia in 2008.

Under the settlement Wells Fargo will offer loan modifications to an estimated 14,900 Californians, which allegedly will involve principal reductions and forgiveness.  The total value of the modifications required by the settlement is estimated  at more than $2 billion.

In addition, Wells Fargo will pay $32 million in restitution to more than 12,000 California pick-a-pay borrowers who lost their homes through foreclosure, plus approximately $1.8 million in costs to the state.

Payments to foreclosed homeowners are expected to average more than $2,650.   See CNN Money article.

 

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One Response

  1. The California settlement was a sham.. and both the new Attorney general and govenor knew about it.. in 2009, without asking Wachovia asked me if they could modify my home mortgage..it was not good but it was take the offer or loose my house. Wachovia said it was the best possible and if something can along later :go for it”.. They full well knew this lawsuit was being agreed to. When the settlement was announced and the details, I wasn’t included..joke was on me, any loan modified in after 2009 were not included in the lawsuit.. so I believe that Wells Fargo knew the suit was settling and modified as many as possible so the wouldn’t have to pay for them..

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