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At the end of the day it’s a wonder that any company is doing mortgages anymore.  Especially FHA mortgages.  Wells Fargo is paying out $1.2 billion in fines to HUD and the DOJ for supposed issues on their FHA loans.  With gut punches like this, maybe it’s better to go into gardening or something.



additional comments on
"Wells Fargo Receives $1.2 Billion Mortgage Gut Punch"

  1. Bob Brickman says:

    The consumer and the whole housing industry gets hurt from things like thi'

  2. Bob Brickman says:

    The consumer and whole housing industry ultimately get hurt from this. It makes me want to get back into the hot dog business.

  3. Always enjoy your updates with the market Frank & Brian. Keep in mind, at the end of the day, every originated loan starts with the sales person first. Just because your lending institution will sell loans are under a certain threshold of risk, doesn't mean "you" as the LO need to originate it. Are you going to leave money on the table for a borrower that could qualify, but maybe shouldn't be put into a mortgage situtation? -YES, but you better damn believe that you will sleep better knowing that you put a borrower into a loan that knows what the hell they are doing, not because "someone told them, you should buy a house."

    Common sense is certainly needed by the LO before they send out any type of qualification letter that would allow a consumer to engage into a real estate purchase contract. Obviously, Wells had some pretty incriminating evidence or I'm sure they would still be battling in the court room today.

  4. Joe Garcia says:

    I'm going to prison for doing state loans, I didn't have 2 mil to buy my freedom.

  5. Tom Reichard says:

    If you can't stand the heat get out of the kitchen! What are you saying here? FHA and the DOJ should just ignore companies illegal behaviour that led to the worst economic crash the world has seen since 1929? Should they just give them a slap on the wrist for almost bringing down our entire economy. Did the DOJ just fabricate these offenses out of thin air? I think not! If you want to play the game you have to play by the rules. Banks and mortgage companies have no one to blame but themselves for the tightening of regulations on them because they have proven themselves completely untrustworthy by their past actions. The American people and the rest of the world have paid a heavy price for those actions and I am glad to see they are being held accountable. And if those affected by the laws want to just take their balls and go home because they don't like the rules good riddance to them. In our capitalist system there will be plenty of other players ready and willing to take their place and provide the loan services in a legal and ethical manner.

  6. Mike Waling says:

    Who paid that $1.2 billion? Wells Fargo? Yes, but where did they get that money – from a rich uncle?
    I have a question… Who gets that money? HUD/FHA & if so, wonder how much of that is to cover their losses and costs to recover – and how much is the punitive fine? And what bank account does that fine go into?
    Thanks a lot!

    1. Christi says:

      Yes John these are the answers we deserve to know! Will FHA now be willing to reduce the cost of the FHA MIP? What would make sense to me is the 1.2 billon go back in to the MIP fund.

      1. Christi says:

        Whoops said John, I was responding to Mike’s post

  7. J Landsdowne says:

    FHA part of our corrupt govt. who’s in bed with the banksters (i.e. Wells), for them it’s business as usual.

  8. Chris Miller says:

    HAHA, I laughed out loud twice at today's post. Get it off your chest Brian.

  9. John W says:

    Hey Brian…..is it possible that Wells Fargo did something wrong, and that’s why they “rolled over” and didn’t fight it? Listening to you rail against the DOJ and the CFPB and the government in general, and regulations, over and over and over and over and OVER, gets really old. You’re a one trick pony. You don’t have any nuance in your analysis. All you know is the banks are benevolent and the government is evil. Hard to take you seriously at all any more.

  10. let all banks stop financing that troublesome market. Let HUD cry about. Its all BS. I think there is a greater, more sinister agenday to wipe out the middle… sorry. Anyone dare prove me wrong?!

  11. Mark Treiber says:

    Tom, Frank and Brian aren't talking about illegal behavior and it wasn't originators who caused the housing meltdown. The folks responsible for the meltdown (S&P, Moody;s, undercapitalized mortgage insurers) experienced no consequences while the orginators were the folks who were punished.

  12. Eric Bade says:

    Adding to Mark's comments, banks and mortgage companies also didn't put the Community Reinvestment Act rules (i.e. quotas and penalties) into place either. The CRA was a direct precursor (and one cause) of the meltdown you refer to. Eric Bade, Executive Mortgage

  13. Eric Bade says:

    FNMA and FHLMC remain in receivership, despite being quite profitable. Are the taxpayers "screwed" when TENS OF BILLIONS of dollars are passed to the Treasury via the GSE's?

  14. Ann Wilkins says:

    I'm in Northern CA and as a listing agent, haven't seen many offers that have a Wells, Chase or B of A approval letter which is fine by me. No one around here seems to use them in this competitive market because we need a 21 day close and agents want to make sure the deal even closes…not always a given with the big banks. An offer with an FHA loan ….tough for buyer in a competitive situation. Jamie Dimond is the poster boy for what is wrong with the banking industry.

  15. Daniel I found your post just embarrassingly ignorant. "Every originated loan starts with the sales person first". It most certainly does not. It starts when that sales originator has a mortgage product or products to sell to that customer. Otherwise there is no transaction whatsoever. How much of a role did the LO have in authoring the byzantine array of exotic mortgage products from 2002-2008? Don't strain your brain trying to concoct an answer. It was -0- input. But you might want to stroll over to Wall Street and ask Bear Stearns, Goldman, Lehman, Morgan Stanley, Merrill,….And to make it worse, "obviously Wells had some pretty incriminating evidence" also shows a remarkable lack of discernment when it comes to our government and the onerous regulatory environment of the past few years. Have you ever even read a newspaper from start to finish? Even for 1 day?

  16. Rudy Romo says:

    I agree CFPB over-reached and changes/tweaks need to be made. However, banks are making a killing on mortgages… Gardeners…Not so much! When bankers get fined it's more like the Fed taking its undeserved "cut" of the banks' exhorbitant profis.

  17. Tom Reichard says:

    Eric Bade I think that's a different subject but I also object to the continued receivership of the GSE's.

  18. Tom Reichard says:

    Mark Treiber I think the originators were just as guilty as everyone else. We all know it was a feeding frenzy back then and originators were doing those no doc, option arm loans and piling on the points to line their pockets. The greed was widespread at least in the Detroit area where I was working.

  19. Tom Reichard i also agree with Mark too, however, brokers pushed those products because people demanded it, people new exactly what those deal were and they didnt care, if the people didnt want those deals, they would had gone by the wayside. If you were not going to orginate that type of deal, the consumer would go and find someone that would.

  20. Tom Reichard says:

    Michael Delgado That's the same argument heroin dealers use to excuse their behaviour! They are simply supplying the product that people are demanding and that they know what they are getting. I think you are helping make the point of how morally bankrupt some of these people were. I would take exception however to the idea that people knew exactly what they were getting in those loans. No one really explained to people exactly how risky those loans would be if housing prices stopped going up. No one believed that would happen. All people were told usually was that the value of their home would continue to go up and not to worry about the rate change on their arm 3 or 5 years later as they could always refinance it at that point. WRONG!!

  21. linda anderson says:

    Cheating is cheating. Going into someone’s account is illegal especially when money is extracted from a customer. This leads to more thieves in this world of ours.

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