Wells Fargo fined $85 million for abusive practices of thousands

The Federal Reserve Board has alleged that Wells Fargo employed deceptive mortgage practices, fraud and unsafe banking practices against thousands of borrowers and is issuing an $85 million fine, their largest ever consumer protection fine in Fed history.

The Fed says that “possibly more than 10,000? mortgage borrowers between 2004 and 2008 were pushed into higher cost loans when they would have qualified for lower rates and less expensive loans.

The fine for each individual case looks to be upward of $20,000 each as the Fed demanded that Wells Fargo fully compensate all customers that were cheated.

At the root of this major fine is “Wells Fargo Financial,” the subprime loan arm of Wells Fargo that was closed last year, with the Fed pointing to salespeople in this division as overly aggressive and commission driven. The group “altered or falsified income documents and inflated prospective borrowers’ incomes to qualify those borrowers for loans that they would not otherwise have been qualified to receive,” according to the Federal Reserve.

The Wells Fargo Financial division sold high cost loans to those who easily qualified for lower cost loans.

Because Wells Fargo estimates that of the 300,000 loans they made during that period, only an estimated 4% were abusive, the bank claims it was a small number of people that committed these abuses and the group doesn’t represent what Wells Fargo stands for.

Nonetheless, they will now be forced to work with the Fed to determine who the borrowers that were wronged are and appropriate compensation given.

In a statement, the Fed said, “In addition to the monetary components of the settlement, Wells Fargo is required to improve oversight of its anti-fraud and compliance programs and incentive compensation and performance management policies for personnel who sell and underwrite home mortgage loans.”

The Fed noted that they have issued consent orders against 16 former Wells Fargo Financial sales personnel prohibiting them from becoming employed in the banking industry. The Fed said that they have “also issued a consent cease and desist order against another former Wells Fargo Financial sales person prohibiting future improper conduct.”

This article published on Thursday, July 21st, 2011 at 12:56 pm | Contact the editor Tags: featured, mortgage crisis, Real Estate News, wells fargo

Category: News

Tara Steele is the News Director at AgentGenius, covering real estate news, technology news and everything in between. If you’d like to reach Tara with a question, comment, press release or hot news tip, she frequently checks her email, simply click the link below.

Email Tara Steele

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Trulia to help consumers rate Realtors and shop commissions? – buzz

In December, Zillow announced they added Realtor ratings to their site, followed by the launch of Mountain of Agents in February 2011, followed by the beta launch of AgentLeaf.com in Spring 2011 after being founded in October 2010, according to CrunchBase.com where it is specifically listed under the description “Realtor Ratings and Commission Rebates.”

AgentLeaf.com offers rankings of real estate agents based on MLS data of their actual sales stats and gives a commission rebate option when consumers use participating agents. The reaction to the commission rebate portion of the site was received negatively by the AGBeat readers and stirred up some controversy. When we interviewed AgentLeaf.com CEO and Founder, Matthew Holder, he was relatively evasive about his plans and claimed his reason was that they were still in beta.

Prior to March, Holder was on a hiring spree with job listings online ranging from a CTO/VP to an Online Marketing Guru, showing all the makings of a budding startup. According to CrunchBase.com, there are five employees and one member of the Board of Directors.

Against the backdrop of competitive sites like MountainofAgents.com and Zillow’s Realtor Ratings system, AgentLeaf.com is no more. The site and all backpages have been redirected to Google.com with no announcement as to why. AgentLeaf.Blogspot.com’s last entry was on March 28, 2011 as was their last Facebook Page entry, and the company’s last tweet was on April 5, 2011. None of these social networks offered any explanation as to why all operations ceased.

Meanwhile, Holder was hired this spring as a Product Manager at Trulia and although no announcement was made on the Trulia Blog of his hiring and his Twitter account doesn’t claim ties to Trulia, Holder didn’t mention Trulia once on Twitter from March 1st to March 30th, but in the 113 days since, 196 references to Trulia have been made on his Twitter account ranging from postings of open Trulia jobs to Foursquare check-ins to Trulia headquarters as well as retweets of various Trulia employees, with Trulia being his primary topic of conversation.

Holder’s Linked-In profile as well as AgentLeaf’s Board of Directors member Alexandre Linares list AgentLeaf’s end date as March 2011 despite that being the time period Holder informed us that they would be launching in various cities shortly.

The timing of all of these events tied together and how a budding company went silent overnight are quite intriguing. Speculation is that the big announcement Trulia has planned for next week is that Trulia has acquired the technology or at least the talent behind AgentLeaf.com to rate Realtors and reveal their sales stats through the MLS, as well as offer the option for consumers to shop for agents that are willing to offer competitive commission rebates. At a minimum, it appears to be a talent acquisition, but it could be Trulia’s foray into the ratings offering they currently lack. We suspect that Trulia will add Realtor ratings in the near future and it remains unseen as to whether or not they will publicly tie that feature to AgentLeaf.com or to Holder.

We have no confirmation as to whether or not the controversial commission rebates portion of the Realtor ranking product would be included, nor what their announcement is for July 28th, and Trulia indicated that they would respond to our request for comment at a later date. What Trulia did tell us, however, is that today, they will be launching agent recommendations but indicated they didn’t anticipate any controversy attached to the soft launch.

This article published on Friday, July 22nd, 2011 at 1:53 am | Contact the editor Tags: featured, Real Estate News, Realtor ratings, Trulia

Category: Editorials

AgentGenius Editor-in-Chief: Lani, named one of Real Estate’s 100 Most Influencial, as well as 12 Most Influencial Women in Real Estate, is a business writer hailing from the great state of Texas in the city of Austin. As a digital native, Lani is immersed not only in advanced technologies and new media, but is also a stats nerd often burried in piles of reports. Lani is a proven leader, thoughtful speaker, and vested partner at AGBeat. You’ll often find her on Facebook and Twitter, so feel free to reach out and get to know her.

Email Lani Rosales

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“Nice wart bar” – do your listings need medical attention?

I had a lot of laughs this week, friends – and most were unintentional. Perhaps the summer sun is causing lethargy. That’s the only excuse I could come up with to explain some of these moronic meanderings. Thanks to Allyson Hoffman for her great contributions from Chicago. 

“Nice wart bar” (Frog Inspection highly recommended)

“Cards for dump included” (Wouldn’t tissue be less irritating?)

“No lame offers accepted” (This must be from the Lame Agent Rule Book…)

“Designd with Fang shui” (From the Caravan Guide For Listings That Bite)

“Pool to dye for!” (Uh-uh – I don’t whip out the Loreal for anyone but Clooney.)

“Perfect for art correction” (Offered by Dominatrix Dorothy)

“Wonderful ocean freezes” ( …Isn’t that a bit hard on your manhood, Siberian Sam?)

“Must sell before labor” (This gives new meaning to “contractual obligations.”)

“Nice bean ceilings” (Are you also serving Chianti, Mr. Lecter?)

“Depressed wood floors” (You’d feel the same way if you had feet in your face every time you were in a horizontal position.)

“High-tech TB equip inc”  (Yipee – I can have my very own sanitarium.)

“Mosaic of glob in foyer” (That’s probably what the seller expelled from his throat after  seeing your spelling abilities.)

“House on end of peninisulim” (My condolences – that sounds terminal…)

“This home offers cure elegance” (Does it have a cure for idiocy?)

“Views of Point Doom” (Point Dume is in Malibu, pal – “Point Doom” is the top of your skull.)

That’s it for this week, folks.  Remember, I’m always lurking with the Blooper Scooper!

This article published on Friday, July 22nd, 2011 at 9:00 am | Contact the editor Tags: featured, MLS bloopers, real estate humor

Category: Editorials, Real Estate

I wear several hats: My mink fedora real estate hat belongs to Sotheby’s International Realty on the world famous Sunset Strip. I’M not world famous, but I’ve garnered a few Top Producer credits along the way. I also wear a coonskin writer’s cap with an arrow through it, having written a few novels and screenplays and scored a few awards there, too. (The arrow was from a tasteless critic.) My sequined turban is my thespian hat for my roles on stage, and in film and television, Dahling. You can check me out in all my infamy at LinkedIn, LAhomesite.com, SherlockOfHomes, IMDB or you can shoot arrows at my head via email. I can take it.

Email Gwen Banta

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Luxury builder Taylor Morrison acquired for nearly $1 billion

You are here: Home » News » Luxury builder Taylor Morrison acquired for nearly $1 billion

Luxury home builder Taylor Morrison and Canadian sister company Monarch homes (built to suit) have been acquired for $955 billion by TMM Holdings LP, which is owned indirectly by investment funds managed separately by TPG Capital, Oaktree Capital Management LP and JH Investments.

Monarch builds in Canada while mega builder Taylor Morrison builds in Florida, Texas, Colorado, California and Arizona where it is headquartered and employs 687 people.

Taylor Wimpey PLC sold both home-building operations. President Sheryl Palmer told BizJournals.com that the buyout will fund expansion of the Taylor Morrison brand.

“We’ve shown that we can be a profitable, viable company during a difficult time. This sale is a vote of confidence for the team and the way we do business and we’re looking forward to capitalizing on it,” Palmer said.

With such a massive acquisition, is there hope for the new home construction sector? Could this motivate builder’s confidence in the long run? Builders have struggled with tight lending for construction and tight lending for home loans, hitting them hard and producing historic lows regarding starts and sales.

Taylor Morrison has beat the trends in recent years and remained profitable despite a housing sector in peril.

This article published on Monday, July 18th, 2011 at 4:33 am | Contact the editor Tags: featured, new home construction, Real Estate News

Category: News

AgentGenius is a rapidly growing real estate social media, tech, news, and opinion site built and designed by and for the on-the-go agent. Our mission is to be a positive force in the industry, led by people inside of real estate. We aim to keep you up to date on trends that we study closely in order to forecast what’s next on the horizon.

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NAR and NAHB spending on Capitol Hill compared to Google and Facebook

Over the years, Google has gained substantial attention because of their close ties with the American government and Facebook has gotten quite cozy with the current administration, even playing host to a town hall meeting with President Obama earlier this year.

Now, the two companies are making headlines for their increased spending on lobbying. In the second quarter of 2011, for the first time, Google’s spending on lobbying was higher than Microsoft’s, and the two companies have just broken their own quarterly lobbying spend records.

Google’s lobbying spend for Q2 2011 was $2.06 million, up 54% over the past year, while Facebook’s lobbying spend was $320,000, nearly matching their entire lobbying effort for 2010.

When we heard these numbers and read opinion columns opining about the large amounts of money the two companies are spending and the feigned outrage is interesting to us.

Our immediate thought was “why the outrage over two million dollars, haven’t these people ever heard of real estate lobbying?” We analyzed real estate spending back in 2010 and many people were shocked at how many industry dollars go toward Capitol Hill.

Take a look at this comparison chart to see if you believe Google and Facebook’s spending is outrageous, and take special note that for the recent year, not all numbers have been reported which is why we included 2009-2010 to give you an idea of an annual spend. We separated out contributions from lobbyist spending, because many Realtors think that all political spends coming from their trade association are for political offices, but the spend by NAR on lobbyists is one of the largest in the entire nation (take special note of the second line of this chart).

Not only are political contributions and spending on lobbyists dramatically higher in the real estate industry compared to technology as demonstrated above, contributions are spread more evenly between state and federal contributions in real estate. Support for Democrats and Republicans varies widely, even within leaders in each sector and NAR appears to be the most fair, indicating that it is often an office that is supported rather than the idea of an individual.

What do you think of the political contributions and money spent on lobbyists in each sector and even within the real estate industry? Tell us in comments your thoughts.

This article published on Friday, July 22nd, 2011 at 2:32 am | Contact the editor Tags: featured, real estate lobbying, Real Estate News, Technology

Category: News

AgentGenius Editor-in-Chief: Lani, named one of Real Estate’s 100 Most Influencial, as well as 12 Most Influencial Women in Real Estate, is a business writer hailing from the great state of Texas in the city of Austin. As a digital native, Lani is immersed not only in advanced technologies and new media, but is also a stats nerd often burried in piles of reports. Lani is a proven leader, thoughtful speaker, and vested partner at AGBeat. You’ll often find her on Facebook and Twitter, so feel free to reach out and get to know her.

Email Lani Rosales

View the original article here

Checks going out to former Countrywide borrowers totaling $108 million

Over three years ago, it was found that Countrywide Financial overcharged more than 450,000 borrowers, all of whom have been waiting reimbursement ever since. The Federal Trade Commission said that as a result of a settlement reached with Countrywide over a year ago, checks will soon be cut and sent to nearly half a million borrowers totaling nearly $108 million.

The borrowers that were overcharged had borrowed from Countrywide Financial prior to its collapse and prior to being acquired to Bank of America three years ago.

The Federal Trade Commission sued Countrywide for unfair and deceptive practices in servicing the mortgages of homeowners in default or Chapter 13 bankruptcy.

According to the FTC, Countrywide used unlawful practices in servicing homeowners’ mortgages. Countrywide allegedly charged excessive fees for default-related services like property inspections, made claims about amounts owed by homeowners in bankruptcy that were false or couldn’t be backed up and didn’t tell people going through bankruptcy when new fees or charges were being added to their loans.

“It’s astonishing that a single company could be responsible for overcharging more than 450,000 homeowners,” FTC Chairman Jon Leibowitz said in a statement. “Countrywide’s unconscionable behavior harmed American consumers on a massive scale and we are proud to be getting every single dollar back to hundreds of thousands of struggling consumers who can least afford to lose the money.”

There were two categories of overcharges, according to FTC spokesperson Frank Dorman that were tied to inspections, home maintenance, lawn mowing and other services that Countrywide provided to homes of borrowers in default.

The checks will begin going out to overcharged borrowers on July 21st with no word as to how long until all borrowers will be reimbursed. Gilardi & Co. is charged with this program and are administering the settlement for the FTC. Borrowers with questions can reach them at 888-230-3196 or ftcvcountrywide@classactmail.com.

This article published on Thursday, July 21st, 2011 at 12:01 am | Contact the editor Tags: featured, mortgage crisis, Real Estate News

Category: Economy

Tara Steele is the News Director at AgentGenius, covering real estate news, technology news and everything in between. If you’d like to reach Tara with a question, comment, press release or hot news tip, she frequently checks her email, simply click the link below.

Email Tara Steele

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RealtyTrac SVP speaks out against national moratorium on foreclosures

In the video above, Rick Sharga, Senior Vice President of RealtyTrac speaks to the current status of the government as their role in housing and especially foreclosures is currently in flux.

Sharga says that the first thing the American government should do about housing is, first “do no harm.” How exactly does the government go about doing that, given how ingrained they are in housing?

Sharga says that government can influence banks for principle balance reductions, but that without job stimulation, there are no buyers and no confidence in the safety to buy.

The government can get involved in financing by not impeding, for example not eliminating the mortgage tax credits which would weaken the desire to buy (the last thing housing needs right now), Sharga notes.

Rethinking the Dodd-Frank provisions is a necessary step, Sharga said. As a nation, it would be unwise to unplug the life support tubes, so this reform must be thought through more fully.

Sharga said clearly and succinctly that he does not support a national moratorium on foreclosures. He said that at best, it is a temporary reprieve for a very small number and that most homeowners at that stage will foreclose anyhow.

A national moratorium on foreclosures would be disastrous, essentially eliminate financing and threaten to damage housing prices, says Sharga. It is a popular but impractical sentiment.

If you read between the lines, Sharga is saying that the current role of government and the role they are attempting to put themselves in for the future, is not much more than a political move and doesn’t do much to move the needle. With Sharga saying that a moratorium that sounds healthy on the surface but doesn’t do much more than stall the inevitable while harming housing.

This article published on Tuesday, July 19th, 2011 at 2:46 pm | Contact the editor Tags: featured, real estate economy, Real Estate News

Category: Economy, Video

Tara Steele is the News Director at AgentGenius, covering real estate news, technology news and everything in between. If you’d like to reach Tara with a question, comment, press release or hot news tip, she frequently checks her email, simply click the link below.

Email Tara Steele

View the original article here