I guess they had to wait for the criminal statute of limitations to expire before they got around to doing anything.
Since this is only about FHA loans (remember Fannie Mae and Freddie Mac were not officially government agencies), the amounts involved are not enough to sink Wells.
Background: http://www.bloomberg.com/news/2012-10-09/u-s-files-civil-mortgage-fraud-suit-against-wells-fargo.html
Dealbreaker makes the point that although there are no embarrassing "smoking gun" emails of mal intent, this case is actually more straight forward because there were clear violations of explicit rules.
http://dealbreaker.com/2012/10/wells-fargo-managed-to-sell-bad-loans-to-government-agencies-without-sending-embarrassing-obscenity-filled-emails-about-it/
3 comments:
I thought you might have drug Wells Fargo in during your previous post - either way, where's the hullabaloo regarding the libor scandal? Why haven't we had heads on plates?
Four years ago I posted http://cfcsux.blogspot.com/2008/04/wsj-libor-is-lie.html
Check the comment from the British Bankers Association :-)
Libor is quoted in London, so don't expect any heads to roll in the U.S.. London is the least regulated jurisdiction, which is why it's so popular with banks. The regulators knew what was going on but looked the other way because the manipulation was actually helping to calm the market during the crisis.
There's also plenty of subjectivity built into Libor, but there are certainly snarky "smoking gun" emails that demonstrate bad intent.
The point of the Dealbreaker article was that, although there are no smoking gun emails with Wells Fargo, the rules violations are much more clear cut than with Libor manipulation.
I spoke with Neil Barofsky, the TARP inspector general and author of "Bailout" and give him a litany of ways that the banks could be prosecuted but he basically said as soon as someone starts to pursue those avenues, they get a nastygram from the Treasury Secretary telling them if they don't back off the economy will collapse.
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