This page has been archived and commenting is disabled.
Wells Fargo Prepares For Tsunami Of Loan Repurchase Demands
Zero Hedge has obtained Wells Fargo's brand new confidential protocol guidelines on loan repurchase demands by investors and mortgage insurers, sent out on October 15, and which becomes effective tomorrow. We have reproduced these below to see just how much more "streamlined" the process is, now that the bank is fully aware of the massive liability it faces as a "loan puttable" entity in a world that is suddenly replete with pervasive and rampant title fraud. Amusingly, in the CIM, Wells states: "Wells Fargo is committed – just
like you are - to honoring contractual obligations with investors and
mortgage insurance (MI) companies*. We want to ensure that the
resolution process for Repurchase and Rescissions is as smooth and swift
as possible." And even so, Wells continues to refuse to halt foreclosures knowing full well it would face billions in impairments should it do so voluntarily, even though as we confirmed Warren Buffett's pet bank was recently caught with its robosigning pants down as well (an event which was sufficient for everyone else to invoke a self-imposed moratorium, even Goldman, whose Litton Loan Servicing unit was rumored to have serviced about 4 or 5 mortgages in the past century... but not the California real estate monster). What is critical, is that Wells Fargo admits that should all avenues under existing legal guidelines be exhausted, and robofraud is certainly a dealbreaker that can not be "explained or validated away", then the bank will be forced to repurchase the loan. In other words, starting tomorrow Wells is preparing for the loan repruchase tsunami to hit the fan as investors and insurers everywhere swamp the bank with tens if not hundreds of billions of repurchase and recissions demands. Suck it in, Wells investors.
Here is the simplified flowchart that will end up costing the bank pretty much all of its balance sheet cash. The only question is how soon.
Step 1
Wells Fargo receives a deficiency notice or demand from the investor. Typically, Wells Fargo has 60 days to resolve the issue.Step 2
Wells Fargo notifies the Seller and provides supporting documentation when available. At this time, the Seller is given twenty-one calendar days to provide an explanation, facts or documentation to demonstrate that the mortgage loan complies with the requirements. If the Seller does not respond within 14 days of the initial notice, Wells Fargo will follow up with the Seller.
Step 3
Wells Fargo will begin internal research (concurrently with Step 2) to resolve the loan issues. During this process, Wells Fargo will determine if there is a missing document and if the document can be located.
For all other issues, Wells Fargo will perform research to determine if there is evidence that proves or disproves the validity of the issue. For example, if the investor provided a review appraisal indicating a value deviation, Wells Fargo will order an independent appraisal review of the origination appraisal and the investor’s review appraisal from a third party vendor.Step 4
The Seller responds to Wells Fargo’s request and either agrees with the investor’s findings or provides an explanation, missing documents or information for Wells Fargo to utilize in drafting an appeal to the demand or MI rescission notification.
If an appeal is not practical, based on all the information collected, Wells Fargo will notify the Seller, allowing them a final opportunity to provide additional documentation.
If an appeal is submitted to an investor, the Seller will be notified of the result of the appeal. If the Seller provided a response that specifically addressed the investor's issues and the investor deems the information to be insufficient to rescind the repurchase demand or MI rescission, the Seller will be given seven (7) calendar days to provide new documentation to support a second appeal. (Please note: Even if documents are provided by the Seller, the appeal may not be successful).
And here is the punchline that will make old uncle Warren just a few billion bucks poorer:
If attempts to refute the demand or MI rescission are unsuccessful, Wells Fargo will be obligated to repurchase the loan from the investor or accept the MI rescission. Likewise, Wells Fargo will issue a demand to the Seller for the repurchase of the mortgage loan pursuant to the provisions of the Loan Purchase Agreement or reimbursement for costs and expenses, if applicable.
Readers can be confident that over the weekend loan investors and mortgage insurers have received identical letters from all other banks as well. The next step: an attempt by every single mortgage investor and insurance company to get every single mortgage repruchased by the originating company on grounds of robosigning fraud.
The banks had their party of a lifetime, and now the terminal morning after hangover has commenced.
And as the letter highlights, all those who may have questions about this particular suicide process, are encouraged to write to IRMRepurchaseResponses@wellsfargo.com.
Full report (pdf)
»
- 32520 reads
- Printer-friendly version
- Send to friend
- advertisements -
In the short time i have been here, i have never laughed so hard or seen as many funny sayings from the ZH crew. I learned years worth of knowledge on how to be a better trader also.
thanks frank, i hope you picked up on some of my trades on how to make a million bucks in the market.
start with 2 million, lol
So did you want frenchfries with that?
Are we sure this is real?
http://etf-central.com/2010/10/17/notes-on-zerohedges-release-of-wells-f...
Wait a second, you're questioning the veracity of a document from a bank?
Nah, just questioning the veracity of an unsourced PDF in general. Not that I'm not short financials too, but there are plenty of reasons someone might try to keep the gap down going Monday in WFC.
Excellent points, document forensics always a good thing here. I just saw you tee up a doozy I couldn't pass up. In all seriousness, it's not uncommon for there to be SW versions all over a map in a large enterprise, especially one as large as WFC. Especially enterprises that are made up of hundreds of acquisitions such as this one.
Are we sure you are?
Didn't say I was sure of anything, just wanted to bring some more evidence to the table.
WFC What F8cking Corpse?
Wells Forecloses Carelessly
We're Fucked Charlie!
Ya know what?...I was being a dick.
I apologize.
I'm having fantasies of Charlie and Warren as the Dukes at the end of trading places running through my head.
Turn those machines back on!
Oooooo, can't find their mortgage papers.
How very scary.
Wait 'till they realize...
they can't find any stock certificates either.
'You told us we could lend them
while you weren't using them.
Now we don't know where they are.
Oh wait, stock certificates are obsolete
just like mortgage paper until...
found those hundred dollar bills arent so good either, depending on which country.
Ask any lawyer you know working on the Lehman bankruptcy (there are thousands) about the (discloseable) persistent evidentiary problems surrounding the ownership of Lehman's (and its former clients') securities. This clusterfuck won't be resolved for years.
ooooooo, can't find the gold and silver to cover your shorts.
Ooooooo, can't find the physical at the LBMA to cover you claim ticket.
That's OK. No problems, we can print up some cash to cover that.
won't Bent Bernanke just crank up the presses (QE infinity), 'grant' the banks the proceeds to buy back all the toxicity, then pledge to buy the shit from those parties?...sure its a biggish balance sheet item but what the hell, banksta's MUST be protected.
Yea but, they got to have a reason, right?
save the equities! especially the banks, they dont look so good right now.
Mr's Obama, Bernanke, and Geithner, please keep savers and taxpayers OUT OF THIS. Contracts were entered between homeowners, banks, and mortage investorys. This is their problem to work out. They need to take the write off hit, not the savers/taxpayers - we are done. Does our vote count or do we just have to keep quiet like good little sheep any pay ????
I predict that further bailouts will = social unrest. Please do not take the country down that road. Bring back capitalism and the rule of law, and let the parties in the contract take their medicine.
Dear George,
Thank you for writing. We all got together and discussed it, and, well, we think you should just keep quiet like good little sheep, and pay.
Hope this was helpful.
Sincerely,
Tim and Ben
P.S. Barry voted "present"
I think they realize they are on thin ice already. What they do will say a lot. I think they'll do it sneaky thru POMOs.
I feel a run on the big banks coming on. Social unrest? There it is.
Whatever you do, DON'T look at the Web Bot predictions for early November 2010. Don't do it.
Sloppy disaster
And he left it for the rest
To clean up after
Now the lawyers do their best
To try to divvy up
What's ever left
In the ending you can bet
Everyone feels cheated
Kiss your ass good-bye
Boy you're out of time
Styx
http://www.youtube.com/watch?v=U2R2KXNQR1M
Yea, what could go wrong? With Wells Fargo the sky's the limit!
From TheDC OP-ED: One nation, under fraud (http://dailycaller.com/2010/10/14/thedc-op-ed-one-nation-under-fraud/print/):
Wells Fargo wanted to foreclose on a condo unit which had multiple mortgages attached to it. Wells Fargo also owned one of those second mortgages. So Wells Fargo spent money to hire a law firm and file suit against the irresponsible lenders at Wells Fargo. Then, Wells Fargo spent money to hire a different law firm in an understandable effort to defend Wells Fargo from the vicious legal attack coming from Wells Fargo
. The second law firm even prepared a legal statement for Wells Fargo which called into question the dubious claims being made by Wells Fargo. Sadly, Wells Fargo won the case, crushing the hopes of Wells Fargo.
Very funny
Frank, I hope you have some coin, silver, gold if you are rich...hope it is your hands as we speak. Regards yaby.
i think its great i still have my hands, even empty, there is no claim against them
teh fed will buy them and pay wfc managing fees.
the taxpayor is going to eat this whole thing
Freddie Mac
The Federal Home Loan Mortgage Corporation (FHLMC), known as Freddie Mac (OTCBB: FMCC), is a government sponsored enterprise (GSE) of the United States federal government. Freddie Mac has its headquarters in the Tyson's Corner CDP in unincorporated Fairfax County, Virginia.
The FHLMC was created in 1970 to expand the secondary market for mortgages in the US. Along with other GSEs, Freddie Mac buys mortgages on the secondary market, pools them, and sells them as a mortgage-backed security to investors on the open market. This secondary mortgage market increases the supply of money available for mortgage lending and increases the money available for new home purchases. The name, "Freddie Mac", is an acronym of the company's full name that had been adopted officially for ease of identification (see "GSEs" below for other examples).
Fannie Mae
The Federal National Mortgage Association (FNMA) (OTCBB: FNMA), commonly known as Fannie Mae, was set up as a stockholder-owned corporation chartered by Congress in 1968 as a government-sponsored enterprise (GSE), but founded in 1938 during the Great Depression. The corporation's purpose is to expand the secondary mortgage market by securitizing mortgages in the form of mortgage-backed securities, allowing lenders to reinvest their assets into more lending and in effect increasing the number of lenders in the mortgage market by reducing the reliance on thrifts.
http://www.chicagobusiness.com/article/20101015/NEWS01/101019921
Fanny/Freddy are stuck with Geithner - The lap dog of Wall St.
Too bad - it's taxpayer bucks getting sucked into the TBTF black hole.
If I am not mistaken when Wells acquired Wachovia it paid 14 billion, then received a tax credit from the IRS for at least that amount.
That means they got Wachovia for nothing. If they have to give back several hundred billion they should have it. There was a lot of assets in Wachovia. I have been told the California assets they picked up by buying (I can't remember the name)Cal bank weren't as bad as others because they did their own property evaluations and were below most others in assigning asset value to the properties. They did have a lot of pic-a-pay loans, but i think they worked most of that out by now.
Citigroup also received a generous deduction equivalent to their TARP "repayment"
WF is the biggest turd of the TBTG banks. They should have gone down right behind Lehman & BS with their $billions of worthless HELOCs and Wachovia's pile of crap. this will bury them without another bailout.
More TARP please...
I've alwasy hated Wells Fargo since the days I had a checking account with them years ago. Pricks. I withdrew my $5 and never looked back.
Futures under heavy pressure this evening !
Dow -60
S&P -6.40
NAS -7
no worries!! will be green by the open.
all on taxpayer's dime ..
Looks like Benron woke up at 4 AM EST. Market turns up, dollar turns down.
In case anyone was wondering why the banks were not lending.
will not lend for another 10 years..
- make that 20...
Wells states: "Wells Fargo is committed – just like you are - to honoring contractual obligations"
translation:
"When we attack, our countersuits will blot out the sun!"
http://www.youtube.com/watch?v=ll37USUoiM0#t=0m50s
What a bad time for this to happen. Some in an attempt to be elected in a couple of weeks may start to talk about this. When real solutions are presented the public will recognize them and elect whomever espouses it. The newly elected congress then could start to clean up the very large mess we find ourselves in.
Or, the media could cover up the above comments and not let them see the light of day, everything continues on it's present course and then it won't be pretty.( Mssrs. Gate's and Buffett et al seem so altruistic in their attempts to give away their wealth of late. Self preservation for they and their families perhaps?)
oh geez, I sure hope Berkshire Hathaway doesn't get the pipe on this deal. The fearless leader , dear old Warren said that Wells Fargo was his kind of bank.
He seems so "grandfatherly."
Why do they never interview employees from the firms that he has taken over?
For a " Fist full of dollars" or "For a few dollars more " i could call a guy , who could call a guy, to take care of that thing for you.
By my guesstimation, the Fed holds M-BS's backed by some 4 million (plus or minus) mortgages.
Ben, have you purchased loans that are now not performing? Perhaps you should consider asking for repurchase. Maybe you should research your portfolio - breaches of representations and warranties, appraisal and property inconsistencies, document and origination errors, legal trail (does the chain of title run to you?), credit violations (including income, ratios and credit history), occupancy. Ben, I think it would be to your benefit to do some due diligence. There's an opportunity here to recover literally millions of dollars, no not millions - billions, no not billions - trillions. Good luck Ben.
Darn!
Should've stuck to treasuries.
Its a windfall for a bank that will just resell them to the Fed at book. They WANT to buy this toilet paper back.
In this age, your security rests with being as big, untransparent, belligerent and irresponsible as possible.
I don't see a legal solution for Wells. Their little pony just died. (Is it just me, or does anybody else get a sense of impending run on the banks?)
One way out is to buy the politicans to pass a law, or have a force mejuere declared on grounds the fiasco threatens the entire banking and economic system (lame duck session alert).
Another way out is to have Federal Reserve buy up their risk. Warren would approve.
All's Well that ends Wells.
I think the run scenario is big. Earlier TD pointed out that the FDIC has increased the insurance on bank accounts to.... infinity. From Dec. 31, 2010 to Dec. 31, 2012.
It used to be $ 100,000 per account. When we had a Bank Run in Sept 08 after the Lehman collapse, it was increased to the current $ 250,000 to stop the bank run that was occurring then.
This infinity increase is Forboding.
That's the little bird that's been pecking at my window too.
Why would they raise the limit on no news/rumors?
"Foreboding" is right.
So, Everyone else has halted foreclosures.
Wells Fargo is odd man out in this session of musical chairs.
So does that mean that
Wells Fargo is pure as the wind driven snow and has strength to get through it?
Or does it mean
Wells Fargo will be the sacrificial lamb and fold like Lehman?
Hey, it's all on a computer somewhere, just like your paycheck, savings, retirement, pension.
Oooops!
Sorry, lawyers and banks and politicians and lawyers say that isn't yours anymore - national crisis and all - but you'll still get S.S. and you can stay in the house as long as you cut the grass and shovel the snow, and fix the roof, and the plumbing, and upgrade the flooring and appliances every 10 years.
Who the hell wants to file a claim with the FDIC? Mattress?, meet Cash. Cash, Mattress.
This week should be an interesting week, but then again every week seems like it will be... Reread the guy who flew his plane into the IRS building manifesto good stuff.. http://www.businessinsider.com/joseph-andrew-stacks-insane-manifesto-2010-2 I'm not advocating killing people but I think this foreclosuregate may be the event that sets everything off.. It's like the world is is drenched in gasoline just waiting for that spark
Muhahahaha. Yes, lets root for the banks to go down. That will solve our problems.
Just so you know, even if you gold bugs own physical you will need some lead to cover your short muscle position. And you angry folks who feel like you got duped by the banks...yeah, maybe you did. Or maybe you participated in the aughts economy where an iPhone, new car lease, McMansion and flat screen were must-haves. But now your fellow main streeters will be coming for you and they don't just want your tax dollars. They want your food, valuables and women. Good luck with that.
Me? I don't want any of this and won't be cheering it on. It won't end well for anyone who loves peace, order and rule of law.
As opposed to letting them keep stealing from us.. yeah, that won't solve our problems either. In fact, that's perpetuating the problem. If the banks go down, they won't be stealing from us any more. Then we can push the reset (read: I told you so button) button on this fucker and maybe get back to some semblance of a normal market amongst other resets.
You see, many of us are ready to take the punch to the nuts to get it over with instead of the daily slap to the face. But if you think we "want" this and are "cheering it on" , then I think you're missing the satirical nature of the post(s). We know full well that what comes after will be no picnic in the park, but at least it will done with so we can move on with our lives. We're all tired of the fucking shenanigans. We probably would have been out of this mess or at least on the way up already, if they just let them go down in 08.
...in 2011, they'll need wings.
I agree with you That I wish shit wasn't like this.. I'm 25 graduated college with a business degree now I'm working as a security guard most of my friends went to college are in a shit load of debt and are working shitty jobs.. Should I have studied harder maybe but for the vast majority of my generation the structural imbalances in this economy are impossible to Over come .. The dream of going to college marrying my g/f buying a house and starting a family is a pipe dream... I duuno how this will play out wethere it's just a slow downward spiral likes it's been or we have an event that excelerates things I dunno..But were on the verge of something
I wouldn't beat yourself up over it. It's happened to A LOT of graduates in all sorts of fields. Jobs being cut and new workers entering the workforce=more un|der employed people. Even if you studied harder, it probably wouldn't have done much more good. You did what you did. The chips landed, brother. Work with what you have; be proud of your job and take it seriously. It may be a hit to your pride.. but only if you let it.
Thanks for the reply man, I do count myself lucky that atleast I Do still have a job a lot of people have it alot worse... Like most people on this site who come here everyday it just gets frustrating trying to even talk to family friends about a lot of the concepts that get discussed on here either it goes way over their head or it turns into a political discussion.. On a side note I been a member here since the beginning rarely post cause I lost my password and can only log on from my phone but think I'm gonna participate more in these discussions
I know plenty of engineering grads (computer/electrical) from 5-10 years ago, who still haven't been able to find jobs. Why? The H1-B visa program has made it a preference of US employers to hire people from India and China in preference to Americans first.
Studying 'harder' wouldn't have helped you.
Well should have been left to go bankrupt in 08, see why Tarp doesn;t work? The Bad Debt is still out their festering.
The Mkt is always right and wins in the end.
What about student loans, auto loans, credit cards etc. We need to look into every avenue of business the banks operate in and check them for legality. Pile it on. Where there's one cockroach there's bound to be more.
Auction Rate Securities
http://www.senseoncents.com/2010/10/phil-trupp-is-ruthless/
I wonder who the hell is funding foreigners who attend US universities and paying out-of-state/out-of-country tuitions?
Stanford, UCB, etc., you name it -- they're full of foreigners. I *know* their foreign families don't have $100k+ to drop on their tuition. Who's providing the loans? Are they somehow sanitizing the crap and selling it to Sallie Mae?
To infinity and beyond.. this is gonna be good. Initially Hank wanted to use Tarp to deal with the bad loans realizing that was futile went to cash injections into the banks via stock purchases. Debt is a Monster.
I guess the general sentiment at WF (or any other robosigner-endorsing bank for the matter) is "How much time and money do we have left for coke and hookers? Is there a prepaid program for those?"
No doubt the plan is for the Black Hole FEd to suck up all of these poorly documented, illiquid and risky MBSs into itself and lock them up behind the monetary event horizon.
Problem? What problem?
FED will hyperinflate buying TIPS and adding to gold holdings all the way. Then when dollar crashes they play dumb and confiscate all the euro gold domiciled in U.S. a la Jim Rickards. This leads to cleansing of debt and the U.S. is ready to rock again.
On the downside, WWIII (The Great Culling) might be in the cards as a result.
You are terminated fuckers.
Kind of a new variant of a Wells notice.
I guess it goes without saying that WTF (I mean WFC...) is soaring this morning. Also interesting that the VIX is way up and QID is flat
Apparently all the comments on this matter are horseshit because WFC is up 2.72% and the guy on cnbc just said everything released by the media last week was massive disinformation.
Seriously man, what do expect CNBC to say?
And it's just a co-inky-dink that Bams is going away to India of all palces, for let's see what is it like 2 weeks, just after the election? File that with things that make you go hmmmmmmmm.
Don't count on any sizable amount of "put backs". They will fight it tooth and nail, sanctity of contract for Wells but not for you. What's next, another FED or Congress bailout? Private business does it so much better, they are the solution.
Hold it. Warren Buffett famously warned of the complexity and risks of tough-to-understand financial instruments such as derivatives, and now he's taking it up the rear on the fallout from pervasive failings of mortgage securitization?
The only sure things in life are:
1) Death
2) Taxes
2a) I, Joe Taxpayer, end up paying for this mess.
Thanks Warren. You too, Charlie. Any chance you could send along a gratis box of Sees Candies, or maybe a DQ gift certificate for my trouble/generosity?
Mmm... Steak 'n Shake. Suddenly I'm hungry for shoestring fries and cheese sauce... *drool*
www.taobao-trade.com have all kinds of pandora jewelry and available for your choice.Wearing our Pandora jewelry, catching others eyes, and enjoying your beautiful <a href="http://www.taobao-trade.com">cheap designer handbags</a></div> ! <a href="http://www.taobao-trade.com">wholesale designer handbags</a></div> For the Pandora Bracelets,we have many styles and colors.Treat yourself to a little bling. Small enough to be worn often and sweet enough to keep you smiling.<a href="http://www.taobao-trade.com">cheap caps</a></div> Enjoy your stay and do browse around, if you have any questions, do not hesitate to contact us.
Really this is a great post from an expert and thank you very much for sharing this valuable information with us.
cheap vps
windows vps
forex vps
ucvhost