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 Wells Fargo fined $85 million

Wells Fargo & Company and Wells Fargo Financial, Inc. have been fined $85 million for steering potential prime borrowers into more costly subprime loans and for falsifying income information in mortgage applications.

Wells Fargo Financial will be required to “re-evaluate the qualifications of all borrowers who took out a subprime, cash-out refinancing loan between January 2006 and June 2008 to account for certain specific steering techniques” and compensate affected borrowers. The amount will depend on various factors.

It is widely believed that the US subprime mortgage crisis contributed to the financial and economic crises. Many homeowners were given more credit than they could afford to pay off, and securities that had been backed with mortgages declined in value.

The Federal Reserve stated that, “The $85 million civil money penalty is the largest the Board has assessed in consumer-protection enforcement action and is the first formal enforcement action taken by a federal bank regulatory agency to address alleged steering of borrowers into high-cost, subprime loans.”

The marcus evans 5th Annual Risk Management for Commercial Real Estate Conference will take place 23-24 September 2011 in Chicago, Illinois, and will include presentations by leading executives within the industry on how to grow portfolios without making the same mistakes that led to the downturn.

Key conference speakers include Kevin Hwang, Director, CMBS Risk Management at Citigroup, John Anfinrud, Senior Vice President, Commercial Real Estate, at U.S. Bank and Bob Walker, Senior Supervisory Financial Analyst, Board of Governors of the Federal Reserve System.

For more information, visit the Risk Management for Commercial Real Estate Conference website

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