REPORT of U.S. Department of Housing and Urban Development Re: Audit for Wells Fargo Bank,Foreclosure and Claims Process



Wells Fargo did not establish effective control over its foreclosure process. This failure permitted a control environment in which

The affiants routinely signed and certified that they had personal knowledge of the contents of documents, including affidavits, without the benefit of supporting documentation and without reviewing the source documents referred to in the affidavits and verifying the accuracy of the foreclosure information stated in the affidavits. A number of affidavit signers admitted having signed up to 600 documents per day. A number of employees engaged as robosigners had little or no education beyond high school and little or no experience in banking or real estate. Work histories (when available) showed a lack of qualifications to hold the titles held by affiants; for example, vice president of loan documentation. Moreover, interviews disclosed that the titles were given for the sole purpose of allowing the individual to sign documents and came with no other duties or authority. Employees who notarized documents, including affidavits, routinely did not witness the signature of the documents and notarized up to 1,000 documents per day.

Affidavit signers and midlevel managers responsible for the affidavits told us that Wells Fargo management was aware that they did not read or verify the information in the affidavits that they signed. Several persons we interviewed said that they had expressed concerns about signing the affidavits (such as swearing that they had personal knowledge of the loan and had verified the document’s content when they had not). Affidavit signers informed upper management that they could not handle the workload. Wells Fargo management did not correct the problem and, instead, in a March 2008 email, reduced the time frames for processing the affidavits from 5 to 7 days to 24 to 48 hours, and the affidavit signers were required to sign the affidavits they received each day at 9 a.m. by 12 p.m. that same day, often signing in excess of 100 affidavits during that time. The following are excerpts from the email:

“The Doc executable team is working very hard to obtain a 48 hour turnaround time for our docs. Due to attorney feedback and our wonderful challenging environment, this 48 hour turnaround time is critical.”

“The doc Executable team will deliver all docs to you for signature by 9:00 EST. We need the docs signed by 12:00. In order to accommodate this schedule I want to encourage you to schedule 30 minutes in your calendar each day so that we can accomplish this turntime. (Name intentionally withheld) will work with each group to develop a pickup location for each group at 12:00.”

The midlevel manager for the affidavit process told us that she, on her own, began what was supposed to be a 2-week study, whereby she and her staff read and verified the information contained in the affidavits before signing. The midlevel manager began this study to conclusively show that her department was understaffed and what staffing level would be required to properly prepare and sign the affidavits. However, after just a few days, upper management became aware of the “unauthorized study” because the affidavits became so backlogged. The midlevel manager was directed to stop the study and return to the practice of signing affidavits without reading or verifying data.

Notaries Did Not Witness Signatures

Wells Fargo did not establish a control environment which ensured that its notaries met their responsibilities under State laws that required them to witness affiants’ signatures of documents they notarized.13 We also interviewed 11 notaries, and they reported notarizing documents without seeing the person sign the affidavit. Some notaries told us that they let others use their notary stamp to notarize affidavits. Some notaries also told us that they notarized documents that were unsigned.

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Law Offices of Barry S Fagan on:

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