This week, Linda Tirelli, a lawyer representing a client in a foreclosure case with Wells Fargo came across a very disturbing piece of evidence: a company manual instructing the bank’s staff in how to forge documents to proceed with foreclosures. The manual instructs employees how to process [mortgage] notes without endorsements and obtaining endorsements and allonges. In essence, if employees lacked the documents needed for foreclosure, they were instructed to make them up. As Tirelli stated to the Washington Post:
“This is a blueprint for fraud,” said Tirelli, who attached a copy of the manual as evidence in the lawsuit filed in U.S. District Court in White Plains, N.Y. “The idea that this bank is instructing people how to produce these documents is appalling.”
The disclosure of the manual has been duly reported in the business sections of major media, but has not made a huge splash. It’s shocking that the media and the public are this numb to the latest revelations of fraudulent behavior by megabanks. Two years ago, several banks paid a settlement of $25 billion for their fraudulent conduct in robo-signing mortgages (although much of that money never actually benefited the people who lost their homes). Apparently, the money paid by Wells Fargo for its portion of the settlement was not enough to deter ongoing wrongdoing. The bank is so emboldened by the failure of the US government to truly crackdown on bank fraud that it was actually willing to create a manual for engaging in fraud.
How is it possible that 5 years out from the financial crash, the steps taken by the federal and state governments to address widespread fraud and abuse in the financial sector are sorely lacking? In a letter to the Justice Department sent on the same day that the Wells Fargo fraud manual was disclosed, three members of Congress – Elizabeth Warren, Elijah Cummings, and Maxine Waters – asked Eric Holder why the Justice Department was not prosecuting mortgage fraud more aggressively. The letter calls out the fact that even though $200 million was appropriated to the FBI to investigate mortgage fraud between 2009-11, the FBI ranks investigating mortgage fraud as its lowest priority. When nearly five million families have lost their homes due to the financial crash brought about by Wall Street, and when many of these homeowners lost their homes through suspect foreclosure proceedings, it is an outrage that the Justice Department is failing to take mortgage fraud more seriously.
What can we do as individuals? One important step to take is stop banking with megabanks. If you have a bank account with Wells Fargo, go to our Break Up With Your Megabank site to find community development banks and credit Unions that support people and communities instead. If you have a credit card with Wells Fargo, use our Take Charge of Your Card site to get a card with a responsible bank or credit union instead.