Wells Fargo Settles 2006 Lawsuit Related to VA Loans
August 04 2017 - 10:23AM
Business Wire
Wells Fargo & Company (NYSE: WFC) announced today that the
company has agreed to settle a lawsuit that claimed some Veterans
Administration (VA) Interest Rate Reduction Refinance Loans
(IRRRLs) originated by Wells Fargo should not have been eligible
for VA guarantees. The suit, which was filed in 2006 and unsealed
in 2011, sought compensation to the U.S. government over guarantee
claims paid by the VA after those loans defaulted.
Under the agreement, Wells Fargo denies the allegations in the
lawsuit but will pay $108 million to the U.S. government to resolve
the claims. Wells Fargo has previously disclosed this legal action
in its public filings, including in its most recent Quarterly
Report on Form 10-Q, and the settlement costs have been previously
accrued. The lawsuit had claimed that some VA IRRRLs should have
been ineligible for VA guarantees because of certain fees charged
to the borrowers when the loans were originated. In 2011,
Wells Fargo settled a separate class action lawsuit by allowing all
veterans who received a VA IRRRL from Wells Fargo between Jan. 20,
2004, and Oct. 7, 2010, to obtain compensation regardless of
whether there were indications that the fees in question had been
paid by the customer.
“More than six years ago, when questions about fees on Veterans
Administration refinance loans were raised, we resolved those
concerns by improving our internal controls and made compensation
available to VA customers who closed a refinance before that time,”
said Tim Sloan, Wells Fargo’s chief executive officer. “Settling
this longstanding lawsuit allows us to put the matter behind us and
continue to focus on serving customers and rebuilding trust with
our stakeholders. We are committed to serving the financial health
and well-being of veterans, and we will continue to honor that
commitment now and in the future.”
Wells Fargo has been the nation’s largest VA lender over the
past several years, having funded nearly 23 percent of all VA loans
guaranteed since 2001. Wells Fargo offers a broad range of
programs and resources to support the financial needs of veterans
and has made a number of other commitments to address their broader
needs. The company’s Military & Veteran Affairs Program was
launched in 2012 to expand its outreach to members of the military
and veterans who may be facing financial difficulties. In addition,
Wells Fargo has:
- Donated more than 300 homes, valued at
$50 million, to veterans in all 50 states.
- Hired more than 6,700 veterans and
participated in more than 900 military job fairs since 2012.
- Launched Hands on Banking® for
Military, a financial education program that has been accessed by
more than 362,000 people since July 2013.
- Donated more than $25 million to
military- and veteran-related nonprofits since 2012.
About Wells Fargo
Wells Fargo & Company (NYSE: WFC) is a diversified,
community-based financial services company with $1.9 trillion in
assets. Wells Fargo’s vision is to satisfy our customers’ financial
needs and help them succeed financially. Founded in 1852 and
headquartered in San Francisco, Wells Fargo provides banking,
insurance, investments, mortgage, and consumer and commercial
finance through more than 8,500 locations, 13,000 ATMs, the
internet (wellsfargo.com) and mobile banking, and has offices in 42
countries and territories to support customers who conduct business
in the global economy. With approximately 271,000 team members,
Wells Fargo serves one in three households in the United States.
Wells Fargo & Company was ranked No. 25 on Fortune’s 2017
rankings of America’s largest corporations. News, insights and
perspectives from Wells Fargo are also available at Wells Fargo
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version on businesswire.com: http://www.businesswire.com/news/home/20170804005472/en/
MediaTom Goyda,
314-591-0113tom.goyda@wellsfargo.comInvestorsJim Rowe,
415-396-8216jim.rowe@wellsfargo.com
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