The bank admitted it certified that thousands of faulty home mortgage loans were eligible for Federal Housing Administration insurance.
When the market crashed in 2008, American taxpayers ended up on the hook for the bad loans.
"Wells Fargo enjoyed huge profits from its FHA loan business, the government was left holding the bag when the bad loans went bust," Manhattan U.S. Attorney Preet Bharara said in a statement. "Today, Wells Fargo, one of the biggest mortgage lenders in the world, has been held responsible for years of reckless underwriting."
http://money.cnn.com/2016/04/08/news/companies/wells-fargo-bad-loans-settlement/index.html?iid=hp-toplead-dom
I guess it is good to see Wells Fargo owned up to their mistake even though it was eight years late. I was unaware of how much these financial giants such as Goldman Sachs, Morgan Stanley and JPMorgan had paid the government for their involvement. I am curious as what the government plans to use this money for.
ReplyDeleteUnfortunate that a big name like Wells Fargo hid bad loans before the housing crash. It's a shame that these companies can be shady and we won't even know what happened until 8 years after. But it is good to see that they must pay for what they did, and hopefully they have to pay for more than what they made in the profits during the crash.
ReplyDeleteEven though it is good that Wells Fargo owned up to their company's mistake, it is hard to trust that other banks did not do the same thing. When looking at how much of a negative impact the mistakes ,such as reckless underwriting, had on the economy, I am glad that Wells Fargo is paying the large amount they are. Also, I am glad that the US government is holding banks responsible and not letting them off the hook. Knowing banks, such as Wells Fargo, made mistakes that impacted the economy in a bad way, the American society can take a breathe in knowing that their government has made strides to better regulate these banks, so the banks will never make the same mistakes as before.
ReplyDeleteI would agree and say that it is good to see Wells Fargo held accountable. I hope that a heavy punishment shows other big banks that they can't get away with wreckless strategy.
ReplyDeleteThis is an interesting revelation given what we are studying. I think it is ridiculous that Wells Fargo is still in business after they contributed to the housing crash. If no action is taken, what is to stop them from exploiting the system again?
ReplyDeleteThis is an interesting revelation given what we are studying. I think it is ridiculous that Wells Fargo is still in business after they contributed to the housing crash. If no action is taken, what is to stop them from exploiting the system again?
ReplyDeleteI agree with everyone that it is great that Wells Fargo owned up to their wrong doing, but unless the punishment is strict this wont discourage other companies from doing the same thing. I wonder if since they owned up to it they will get a break on the punishment.
ReplyDeleteIt's good to see them come forward about what happened, but it seems like a small ripple in the pond. I wonder how many other companies were holding out as well. I imagine more saw it coming than one may realize and they were gonna protect their assets before the market exploded.
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