Wells Fargo could face penalties on foreclosures

AP News
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Posted: Feb 25, 2011 8:09 PM
Wells Fargo could face penalties on foreclosures

Wells Fargo & Co. says that it is being investigated by several government agencies for its foreclosure practices and is likely to face enforcement actions.

In a filing with the Securities and Exchange Commission on Friday, the San Francisco based bank said the investigations focus on whether the bank violated fair-lending laws and whether it followed proper procedures with its foreclosure affidavits. The company noted that the enforcement actions could include monetary penalties.

"With regard to the investigations into foreclosure practices, it is likely that one or more of the government agencies will initiate some type of enforcement action against Wells Fargo, which may include civil money penalties," the company said in its filing. "Wells Fargo continues to provide information requested by the various agencies. "

The bank also said seven class-action and several individual-borrower actions have been filed against it.

The actions generally claim that Wells Fargo submitted fraudulent affidavits or other documents to foreclose on homes.

"Specifically, plaintiffs allege that Wells Fargo signers did not have personal knowledge of the facts alleged in the documents and did not verify the information in the documents ultimately filed with courts to foreclose," Wells Fargo said in the filing.

The plaintiffs are seeking relief ranging from cancellation of mortgages to monetary damages, the bank said.

Wells Fargo said it could face as much as $1.2 billion in losses from the current litigation it faces.

The bank's shares ended Friday up 96 cents, or 3 percent, at $32.40.