Wells Fargo Is Exiting Mortgage Lending & Why It Matters; Hate & Love for WFB
Embessler Stole $300,000 From Me And Heejin
In 2011, Heejin and I caught our bookkeeper embezzling money from us.
It was over $200,000 we knew for sure, but we never figured out the exact amount because of … Wells Fargo.
As soon as we got suspicious of our bookkeeper, we went to Wells Fargo and our “banker” insisted that we immediately close all of our accounts and open new ones.
It was completely unnecessary we later found out, but she did so because she got a bonus for every new account she opened and that was ALL that mattered to her.
To make matters worse, Wells refused to give us access to our old accounts after the fraud came to light – unless we submitted a formal subpoena and jumped through all kinds of hoops.
It was a nightmare of unmitigated proportions – fostered almost entirely by Wells Fargo.
This is because Wells honored all of the fraudulent checks signed by our bookkeeper, and they made it next to impossible to recover our funds or even do an investigation.
My hatred for that fraudulent institution knew no bounds – but I am going to defend them today.
Wells Has Been the Same for 30 Years
Equally interesting, I worked for Wells Fargo out of law school in what was the most soul-sucking, stultifying environment you could possibly imagine.
For starters, they had implemented the very culture that brought the bank to its knees in recent years – and they openly bragged about it internally, as they thought they had discovered gold.
This culture consisted of incentives to open up bank accounts for everyone whether they wanted them or not and for finding ways to slap fees on anyone and everyone.
It was also not a merit-based culture, but one entirely dependent on attaching yourself to the right person above you.
So, there has never been any love lost between Wells Fargo and me – but I am going to defend them today.
Wells Fargo: Whipping Post of CFPB; Exiting the Mortgage Industry
Wells Fargo recently announced that they are exiting the mortgage industry – and it is largely in response to the CFPB’s recent investigation and $3.7 billion fine imposed on Wells Fargo.
But, here’s the thing. Wells Fargo has already been investigated to death for their various offenses, and they have already paid billions in fines. You can see a list of them here.
Many of Wells’s offenses were unconscionable and very deserving of massive fines – to be clear. BUT – it now appears that the CFPB is just coming back to the table to extort funds and to make political hay.
And again – I have no love for Wells Fargo. So – if this helped consumers, I would be all for it.
BUT – it does not help anyone at this point.
Wells had already learned its lessons, as the bad publicity alone from all of its offenses in years past has cost it tens of billions. And – it has already paid billions in fines, as I mentioned.
The cost of the excess fines simply gets passed on to consumers in the form of higher fees or rates. I might be less concerned about that if I saw some evidence that the CFPB planned to share some of the fines they collect with consumers who were actually harmed, but I am not seeing any.
Worst of all: When one of the largest mortgage lenders in the world exits the space, it eliminates a huge chunk of competition and that only results in higher rates for borrowers everywhere.
So, yes, JVM will be helped by Wells Fargo’s partial exit from the retail mortgage world (where they offered loans directly to consumers). But – we will also be hurt by Wells Fargo’s complete exit from “correspondent lending” – where they buy closed loans from mortgage banks.
This is because Wells often offered us the best prices for our loans – so losing Wells will adversely impact our rates and those of all mortgage banks.
We need regulations obviously, but overbearing and political regulators simply make life harder and more expensive for everyone – with no benefit to anyone but the regulators and the politicians who will make political hay out of nonsense.
This is just another reminder that we need to be careful what we vote for, and that “get-‘em-ism” often ends up hurting the wrong people.
Founder | JVM Lending
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