Wells Fargo will refile 55,000 foreclosures

Wells Fargo will refile 55,000 foreclosures

The announcement by Wells Fargo & Co that it will re-file documents on 55,000 foreclosures immediately drew flak from a state attorney general and could be an admission by the bank of possible irregularities in their repossession procedures.

While other rival banks had promptly put a moratorium on their foreclosure proceedings in response to allegations that robo-signers had tainted thousands of foreclosures, Wells Fargo did not provide relief to its homeowners and instead continued to institute foreclosures against delinquent borrowers.

The Attorney General for Ohio had expressed its concern over the recent Wells Fargo announcement, contending that the bank had assured them that its foreclosures are free from any irregularities.

A joint probe had already been started by all 50 states to investigate claims that thousands of foreclosures were improperly instituted and homeowners were evicted without proper verification of their signatures and documents. If the banks were later found to have violated any law, they could be fined or compelled to repurchase homes that were defectively foreclosed.

The bank is planning to re-file documents which it found faulty for lack of adherence to bank's protocols and standards in 23 states by middle of November. A spokesperson for the bank also noted that they found human errors and are currently fixing the same in said documents, but declined to elaborate further on the matter.

But the bank insists that a moratorium is unnecessary since it believes that their foreclosures were all properly done. The data that Wells Fargo released showed that, on the average, their foreclosures only cover delinquent borrowers whose accounts have been past due for 16 months.

Since the controversy arose, large mortgage firms and banks have voluntarily put a moratorium on their foreclosure activities on all 50 states to determine the extent of the paperwork problems. But some moratoriums have already been lifted, at least partially.

Wells Fargo said that the issue will not affect their mortgage repurchase obligations as they have a sufficient reserve of $1.3 billion to repurchase bad loans from their investors.

The recent foreclosure mess had raised concerns over the ability of banks to repurchase faulty mortgages resulting from irregular paperworks.

But the US Treasury's homeowner preservation office downplays any fear of systemic threat, adding that their regulators are constantly monitoring the situation.

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