Fed hits Wells Fargo with $85 million mortgage penalty

[chill_wind]

Fed hits Wells Fargo with $85 million mortgage penalty

Dan Levine
Reuters US Online Report Business News

Jul 20, 2011 17:52 EDT

SAN FRANCISCO (Reuters) - Wells Fargo & Co agreed to pay a $85 million civil penalty to the Federal Reserve Board for allegedly steering borrowers into costly subprime mortgages, the largest fine the Fed has ever imposed in a consumer-enforcement case.

San Francisco-based Wells Fargo will also compensate borrowers in connection with sales practices at a Wells subsidiary, according to a cease and desist order issued by the Fed on Wednesday. Those costs have a potential to reach $200 million.


(snip)

Politicians and consumer advocates have long criticized banks for enticing borrowers into subprime loans when they could have qualified for more affordable prime mortgages.

Wells Fargo might have to pay between $1,000 and $20,000 in restitution to borrowers affected by the alleged faulty mortgage practices, the order said. The number of borrowers who may be compensated is estimated to be between 3,700 and possibly more than 10,000, meaning the potential exposure could reach $200 million.

http://talkingpointsmemo.com/news/2011/07/fed_hits_wells_fargo_with_85_million_mortgage_pena.php

(edit to paragraph limit)

[CleanGreenFuture]

1. Pfffft...is that all? Chump change.

[Donnachaidh]

2. +1000. nt/

[DocMac]

3. All I got on me is $10 billion...

you got change?

[chill_wind]

4. +1000

Heh.

[lpbk2713]

5. It's just the cost of doing bidness to them.

They won't even raise an eyebrow.