Wells Fargo Targeted "Mud People" with "Ghetto Loans"

Bullion Cube wrote:
KingGorilla wrote:

Pharacon there is a professional and legal obligation of fair dealing in the US. Taking advantage of ignorance on any party violates that. Not to mention knowingly giving borrowers the worst possible loan, when they qualify for a much better one is wanton and malicious.

A plumber gives you a quote to fix your toilet, and tells you you won't finder a better price anywhere else in town. You believe him and agree to his price without looking around. You find out later he overchanged you.

Your recourse is to not use that plumber again because he was "wanton and malicious." His own actions should put him out of business as he gets a reputation for foul play and people stop calling him up for his services. The people quoted in the article, and most of the people arguing against Pharacon's point on personal responsibility, are stating that the people should be able to sue the plumber for giving bad quotes.

Good companies get good reputations, and good consumers generally get better prices. A society in which consumers don't have to worry about doing their homework because they can always sue later becomes hugely inefficient, and it's mostly lawyers and politicians that benefit.

Incorrect, if I'm going to have anyone do anything for me I get bids! That is the same way I handled my loan, I would call up 5 minimum and tell them what I want. Then they would come back with bids to get my money. Only a fool would go to one person and then say welp he says this is what I need I better sign up.

Sorry folks but business is business and if they want to play fast and loose with sales pitches that is fine. But if they borking the loan AFTER it is signed then that is criminal, till then the consumer should wake up open his eyes and READ THE DAMN CONTRACT.

I'm tired of this nanny state "let me hold your hand because you're to dumb to do anything yourself" crap. You live, you take your lumps and you learn.

It becomes criminal when they specifically start targeting black families for this practice. Now if they were equally douchebag like to every customer it would be different. It seems that this point has gotten lost in the pages of discussion.

Also, the fact that they withheld information and misused what was given by the buyers is important. Do you go to into every store and say "Hey, do you have this somewhere not on display that is cheaper? Maybe just for white customers?" That's not how business should have to be conducted, and there are fair practice laws and regulations to prevent those sorts of things. But that's essentially what they did.

Pharacon, I feel like the other side of your argument is that it's okay to abuse, mislead and rip off customers, as long as they don't catch on to it. That it's *always* the customer's fault that they were taken in. Is that the basis for business, then? Should fraud and other cons be legal, since it's the customer's fault that they were taken? Because you seem to regard any protections at all as nanny-state meddling.

Trainwreck wrote:

It becomes criminal when they specifically start targeting black families for this practice. Now if they were equally douchebag like to every customer it would be different. It seems that this point has gotten lost in the pages of discussion.

This is the key here. It's okay for businesses to be douchebags.... well, it's not okay, but it's legal in some ways, at least.

What's not legal is to discriminate about who you are a douchebag to.

Trainwreck wrote:

It becomes criminal when they specifically start targeting black families for this practice. Now if they were equally douchebag like to every customer it would be different. It seems that this point has gotten lost in the pages of discussion.

Bullsh*t. It's fraud. Fraud's supposed to be illegal regardless of who you do it to.

JoeBedurndurn wrote:
Trainwreck wrote:

It becomes criminal when they specifically start targeting black families for this practice. Now if they were equally douchebag like to every customer it would be different. It seems that this point has gotten lost in the pages of discussion.

Bullsh*t. It's fraud. Fraud's supposed to be illegal regardless of who you do it to.

x2. Falsifying loan documents is fraud. Wells Fargo is doubly guilty because they basically made it a standard business practice when dealing with black people.

OG_slinger wrote:
JoeBedurndurn wrote:
Trainwreck wrote:

It becomes criminal when they specifically start targeting black families for this practice. Now if they were equally douchebag like to every customer it would be different. It seems that this point has gotten lost in the pages of discussion.

Bullsh*t. It's fraud. Fraud's supposed to be illegal regardless of who you do it to.

x2. Falsifying loan documents is fraud. Wells Fargo is doubly guilty because they basically made it a standard business practice when dealing with black people.

Yeah. For clarity's sake, fraud is illegal and specifically targeting minorities for fraud is probably also illegal.

carefree wrote:

spam

This gets +1 for "on topic spam."

Not as cool as when that marketing girl showed up when we were discussing dress code for a show she was actually promoting, but.... hah.

Wow, the term mud people and loans pulled in a payday loan spammer, allow me to act indignant for a moment.

Pharacon wrote:

I'm tired of this nanny state "let me hold your hand because you're to dumb to do anything yourself" crap. You live, you take your lumps and you learn.

This sort of attitude, and the disenfranchisement resulting, will do more to help Communism than socialized medicine ever will.

I honestly do not understand how any human being can think their way through and support the banks or blame the customers. The customers were being directly lied to, and their papers were being deliberately falsified within the bank to make them look like poorer candidates, so they paid higher interest rates.

There's no way to even tell yet that the customers had any way to know they were paying the higher interest rates. When you get to 'fraudulent documentation to shaft customers', presuming that the customers were actually told the real details of their loan is rather questionable. Blaming them for 'not shopping better' when we can prove that the bank was already lying internally is pretty sh*tty. Maybe they were promised 4% verbally, but got 8% once the first bill showed up.

I'm all about heads on pikes for this one. I'm just not sure where to display the pikes. I imagine there might be quite a tussle for the honor.

I don't watch much TV... is this still getting any media play? It really should.

(edit: yes, I'm kidding about the pikes, but I would love to see every person involved in this scam bankrupted and homeless.)

Malor wrote:

I honestly do not understand how any human being can think their way through and support the banks or blame the customers. The customers were being directly lied to, and their papers were being deliberately falsified within the bank to make them look like poorer candidates, so they paid higher interest rates.

There's no way to even tell yet that the customers had any way to know they were paying the higher interest rates. When you get to 'fraudulent documentation to shaft customers', presuming that the customers were actually told the real details of their loan is rather questionable. Blaming them for 'not shopping better' when we can prove that the bank was already lying internally is pretty sh*tty. Maybe they were promised 4% verbally, but got 8% once the first bill showed up.

I'm all about heads on pikes for this one. I'm just not sure where to display the pikes. I imagine there might be quite a tussle for the honor.

I don't watch much TV... is this still getting any media play? It really should.

No, of course not. Michael Jackson died. We will never hear any other news story ever, ever again.

Malor wrote:

I don't watch much TV... is this still getting any media play? It really should.

(edit: yes, I'm kidding about the pikes, but I would love to see every person involved in this scam bankrupted and homeless.)

Unfortunately, not really. I saw an LA Times article the other week about BoA basically doing the same with the Hispanic community, but targeting people fresh off the boat with fee-laden accounts.

It's easier for people to blame the consumer rather than accept that the banks, mortgage brokers, and others were running corporate-backed programs to designed to exploit minorities and poorer people.

Malor wrote:

(edit: yes, I'm kidding about the pikes, but I would love to see every person involved in this scam bankrupted and homeless.)

Honestly, I am really for pikes + heads. The consequences for truly massive fraud/theft are clearly not sufficient to act as a deterrent or keep society safe. Fining a company may effect real change, or it may encourage them to lobby for new rules or hire different accountants. I'm not in favor of every person who did this getting their own spike, but the people who orchestrated it should get a little one-on-one time with a guy in a black hood.

Malor wrote:

Another way of putting it: these people are still screwed, still have houses they can't afford, and destroyed credit ratings. Some of them will never recover. And we paid Wells Fargo to do it. We looked sorrowful when things mysteriously went bad, and handed them billions of dollars.

QFT

And if you really want to see how screwed we really are, read Matt Taibbi's latest article: The Great American Bubble Machine . I haven't watched the video, I read the story in my print version of RS, but it'll send shivers down your spine, about how intentional actions like these mortgages and so much more were intentional, planned, and ongoing.

Anecdotal story about mortgages: I have friends with stellar credit, high income, buying a reasonable house...probably half the house they could have qualified for, but one they could pay for if either of them lost their job. These are smart folks. They got their mortgage papers and read them over, then took them to the lawyer. They asked the law office to have two different people review the document and all the various subclauses. What the law firm found, buried in a footnote to a subclause was that the house had a balloon payment of almost 50k in the 4th year. If they didn't make the balloon payment, the house would revert to the lender. They weren't trying for an ARM loan, this was a traditional 30 year note at 5% or thereabouts. The house sale price was around 250k. This loan was designed to force the buyers to default by demanding 20% of the total loan write-up amount for no good reason whatsoever.

Needless to say, they didn't sign the loan, and did report them to various agencies...not that it did any good.

Edit to add: Pikes yes! Bailouts, no.

Wells Fargo agrees to $175M in payments to compensate for biased lending.

Robear wrote:

Wells Fargo agrees to $175M in payments to compensate for biased lending.

That's about $5,150 per victim. Actually, much less considering they fleeced each minority loan recipient out of thousands of dollars.

This is why penalties of this sort should be massive, like an entire year's worth of profits. It's the only way businesses will change their behavior.

AP wrote:

Wells Fargo & Co.'s (WFC) second-quarter profit rose 17% from a year earlier as the nation's fourth-largest bank by assets added loans, cut staff and expenses and reduced its debt.

Wells Fargo's $4.6 billion profit, another record, was driven by a 4% increase in revenue from a year earlier, to $21.3 billion.

'Twas a mere speed bump for their money-making machine.

Robear wrote:

Wells Fargo agrees to $175M in payments to compensate for biased lending.

It would be interesting to see how much revenue they earned from these programs. If I earned $200 million in revenue and have to pay $175M in fines, how does that work? Stupid government.

Ulairi wrote:
Robear wrote:

Wells Fargo agrees to $175M in payments to compensate for biased lending.

It would be interesting to see how much revenue they earned from these programs. If I earned $200 million in revenue and have to pay $175M in fines, how does that work? Stupid government.

You are blaming the government on a hypothetical situation you made up in your own mind?

goman wrote:
Ulairi wrote:
Robear wrote:

Wells Fargo agrees to $175M in payments to compensate for biased lending.

It would be interesting to see how much revenue they earned from these programs. If I earned $200 million in revenue and have to pay $175M in fines, how does that work? Stupid government.

You are blaming the government on a hypothetical situation you made up in your own mind?

way to miss the point. My point is that if the fine is less than the revenue earned by Wells, then the government is stupid.

Ulairi wrote:

way to miss the point. My point is that if the fine is less than the revenue earned by Wells, then the government is stupid.

Thank you. So many people miss that point.

Kraint wrote:
Ulairi wrote:

way to miss the point. My point is that if the fine is less than the revenue earned by Wells, then the government is stupid.

Thank you. So many people miss that point.

Yeah thanks Ulairi.. I did miss that point. Sorry for the call out like that.

Just to clarify, my comment was regarding the (in)effectiveness of punishing someone by taking a fraction of their ill-gotten gains, not picking on you Goman. I get rather angry with reality whenever I hear of a fine of $xx million being leveled against a company that swindled $yyy million from someone.

Kraint wrote:

Just to clarify, my comment was regarding the (in)effectiveness of punishing someone by taking a fraction of their ill-gotten gains, not picking on you Goman. I get rather angry with reality whenever I hear of a fine of $xx million being leveled against a company that swindled $yyy million from someone.

Hey, the legal establishment has to guarantee their cut of the action somehow. Serves them right for getting caught!

/sarcasm

Kraint wrote:

Just to clarify, my comment was regarding the (in)effectiveness of punishing someone by taking a fraction of their ill-gotten gains, not picking on you Goman. I get rather angry with reality whenever I hear of a fine of $xx million being leveled against a company that swindled $yyy million from someone.

I am serious.. I didn't understand at all. Now do I agree with his conclusion? Yes. And so do you it seems.