“What do you think of the Wells Fargo settlement last Friday? As I understand it, Wells “admitted” to the claims in the settlement, but its “non-response” press release seems like a denial? The government’s harsh claims (that Wells was a poor underwriter of FHA mortgages over a long period of time, that Wells intentionally defrauded FHA by not disclosing QC findings for years, and that Wells’ poor underwriting of FHA loans caused people to lose their homes..) seem mostly false to me, knowing the Democrats/liberals in charge of our government the past 7 years have a goal of cementing blame on Wall Street/the Banks/mortgage lenders for the crisis…

…Wells didn’t apologize for intentionally defrauding FHA (and harming homeowners) and one low level manager is the scapegoat? FHA doesn’t terminate or suspend Wells from the direct endorsement program? There is no discussion of an independent monitor, to ensure the loans Wells delivers to FHA now meet its parameters? There is no discussion of underwriting changes/improvements that have been made by Wells? And importantly, Wells’ shareholders and the market for its stock didn’t react at all, despite the seriousness of the government’s claims and mortgage lending and underwriting being at the core of Wells Fargo’s past, present, and future business model. Why? Because the government’s claims are largely false and most everyone important to Wells…its regulators, its shareholders and other institutional investors, and its employees know that to be the case and because Wells’ reputation won’t be damaged with its customers, because most aren’t paying attention and/or don’t care and/or don’t believe the government claims? I think it’s something like this. Love to hear your thoughts. What do you think?” Mike Perry, former Chairman and CEO, IndyMac Bank, April 12, 2016

Here are some of the industry responses I received privately (and so I have made them anonymous) to the above:

“Mike, Wells has impressed me over the years as being extremely well run, and I can’t believe they did anything wrong other than by accident. I like Dan Gilbert’s approach which is, dammit, we didn’t do anything wrong, we’re not writing a check, and we’ll fight you in court till hell freezes over. I’d like to have enough money such that, if something like this happened to me, I’d go on TV, say that I refused to knuckle under and admit to something I never did and then tell the world that effective tomorrow, I was closing the company.  And it would be great if I were the biggest lender in the country. What if Atlas shrugged?  Well, I just shrugged.”

“The fact that the government didn’t terminate Wells’ direct endorsement speaks volumes.  Wells is the best of the banks and conservative.  FHA audits every originator so where were they prior to the crisis.  It Is easy for any objective observer to assess the motivations of the government.”

“Mike, I look forward to discussing this when we are together.  I never thought wells did a thing wrong and all the regulators have done is push wells and others out of the fha market.”

“Interesting stuff, Mike..thanks for sharing.  I think you’re spot on…these governmental grabs are known for what they are by those who are informed and no longer cause gasps by their announcements…accepted for simple exercise of the government’s practice of extortion of financial institutions for damages not proven and amounts not supported by facts.  Blah, blah, blah…..you’ve heard it from me more times than we can count(!).”

“Mike: Nice to hear from you. To be candid, I have largely stopped paying attention to the myriad settlements the government has forced….including this one. I think your thoughts are generally on point, however. I found that when I focused on and stated any opinion on government actions in the wake of the housing crisis….I tended to get into trouble professionally. The last 8 years have not been a good time to be a squeaky wheel.”

Wells Fargo’s FHA Settlement Press Release, April 8, 2016

The Department of Justice’s Wells Fargo/FHA Press Release, April 8, 2016

Posted on April 13, 2016, in Postings. Bookmark the permalink. 1 Comment.

  1. another in a long string of the central regime’s takeover of shareholders’ rights and assets without going through the more overt nationalization of private enterprise….steal the assets through sham coercive measures and you get all the benefits of ownership (like taking dividends) without making it obvious that nationalization is actually taking place. Best of all worlds…fleece stockholders of their assets without having to take risk or make an actual investment…only a central regime with the overpowering ability to ruin you could cut that deal…

    Mark Nelson 3256 Sitio Tortuga Carlsbad, CA 92009 760.473.7558 mnelson.doit@gmail.com

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