Wells Fargo

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.

In one sense, this is old news. But seeing all of "Linda Green's" signatures rounded up in one place is still pretty eye-opening.

Sorry Warren Buffet and Charlie Munger: the lie was fun while it lasted. Suck it up.

BN  *CALIFORNIA AG CALLS ON BANKS TO HALT FORECLOSURES IN CALIFORNIA

and there's more:

BN  *AG BROWN SAYS IN TALKS WITH BOFA, ALLY, JPMORGAN, WELLS FARGO

and yes, it's now airborne:

BN  *NEW MEXICO AG CALLS FOR SUSPENSION OF MORTGAGE FORECLOSURE

The direct, unbiased, Wall Street Puffery filtered, skinny on Wells Fargo's latest results.

The lead story this morning of ZH is "The Only Thing Better Than A Zero Hedge? Wells Fargo's "Never Lose" Economic Hedge", explaining more accounting shenanigans (if you read the links below, you will see that I have caught Wells in a few rather aggressive interpretations) related to MSR's. One thing that was noted was the inputs for valuing MSRs using interest rates as was extolled by management. Well...

Did a hedge gone wild account for nearly half of Wells Fargo's Q4 earnings? More importantly, when the economy turns sour, will the same "hedge" drag the company's net income down faster than a financial weapon of mass destruction obliterates lower Manhattan? An analysis of Wells Fargo's Mortgage Servicing Rights and associated "economic hedges" indicates that investors should be concerned by a flashing red light hidden deep within the bank's assets, and the associated loose accounting principles.

I have decided to release a significant amount of opinion on Wells to the public, and have created an extended version of the report for subscribers with geo-specific charge-off estimates stemming from the FDIC/NY Fed model that we have created in house. A rather comprehensive piece of work. It appears that much of the sell side community is much, much more optimistic on the prospect of Wells than I am. It must be the Warren Buffet investment...

No matter where the stock market rises to, no matter what accounting shenanigans are being pulled, and no matter what program traders or momentos are pushing for the moment, sooner or later (usually sooner than many realize) the fundamentals come home to roost. Enter Wells Fargo...

Can someone please explain why Mr. Bove noted on CNBC that Wells Fargo is proving "itself to be a standout" in the banking industry (2:30 into the clip), that it would help push the market higher, and that is it the big winner in today's earnings derby, a mere nine hours before he ends up downgrading the company to a SELL? Perhaps, the SEC can advise on that particular conundrum.

Let me know the chances of the FDIC's absorbing a behemoth such as the CDO trading, CDS writing, off balance sheet VIE having, QSPE bulging, California and Florida Zero recovery 2nd lien sporting Wells Fargo in the case some of its arcane and non-performing assets really hit the fan. I am getting ahead of myself though. Let's take this from the beginning.

And, as usual, compliments of Government Sachs.

Someone just traded 10,000 Oct $26 Puts on the ISE. At first blush it appears it was a bid-side trade, and not a roll.

"Wells Fargo (NYSE: WFC) CEO John Stumpf says bank will pay back TARP soon and that it will not need to raise equity to do this."

Surely the increase in "compensation close to the average pay for similar executive roles at peer group companies" is very much deserved, and Zero Hedge approves the very prudent decision by WFC's board of directors. None of this would be made possible without the generosity of taxpayers and Bernanke's plan to bog America in trillions of unsustainable debt for generations to come (aka the steep yield curve). Look for WFC's TARP repayment announcement coming to an 8-K near you any day now.

If you had to create a mortgage that was more toxic and more destructive than a subprime loan, you would have a very hard time creating that product. Yet leave it to creative finance to spawn a devilish product with the unique name of option ARMs.