Taibbi writes: "Reporters and politicians are lining up to congratulate
Wells Fargo for its multimillion-dollar neighborhood grant program - but
they're leaving out one small detail. Wells Fargo was forced to launch
HomeLIFT under the terms of a robo-signing settlement."
Matt Taibbi attending an Occupy Wall Street demonstration at Bryant Park in
New York. (photo: Griffin Lotz/Rolling Stone)
Wells Fargo's Master Spin Job
By Matt Taibbi, Rolling Stone
03 October 15
Reporters and politicians are lining up to congratulate Wells Fargo for its
multimillion-dollar neighborhood grant program - but they're leaving out one
small detail
If you still don't believe our brethren on Wall Street have planet-sized
cojones, check out this story.
All over the country, Wells Fargo is making headlines for launching a
multimillion-dollar homeowner assistance program called HomeLIFT, which
among other things offers $15,000 down payment grants to prospective
home-buyers.
Local mayors in big cities from one end of the country to the other are
showing up at ribbon-cuttings and throwing rose petals at the bank for its
generosity. Newspapers in turn are running breathless profiles of the
low-income homeowners who will now get to buy dream homes thanks to the
bank's beneficence.
Some knew, some didn't, but all are leaving out one key detail: Wells Fargo
was forced to launch HomeLIFT.
To understand the background, we have to go back to July 25th of last year,
when a federal judge in the Northern District of California approved a
settlement in a case called City of Westland Police and Fire Retirement
System v. Stumpf. The suit was brought on behalf of shareholders by Robbins
Geller, the same firm featured in a story I wrote two years ago about the
ratings agencies.
For those who are fortunate enough to have forgotten, robo-signing was a
common practice that devastated families during the foreclosure crisis.
People all over the country found themselves booted out of their homes
thanks to bogus affidavits signed by "vice presidents" and "regional
managers," who were often scraggly kids just out of college blindly signing
hundreds of documents a day, if not more.
It was a kind of systematic perjury, and most of the major banks eventually
copped to doing it.
Wells Fargo was one of those banks, joining JPMorgan Chase, Bank of America,
Ally Financial, Citigroup and others in a sweeping $25 billion settlement
with state and federal regulators finalized in 2012.
However, the road to that settlement was not smooth. According to some
stockholders, the company's board of directors failed to cooperate with
investigators throughout the process. A court later found that the Wells
board "opposed discovery requests, filed motions to quash, and refused to
provide details concerning the Company's policies," which made it hard for
investors and shareholders to know what to do about the scandal.
So those shareholders sued Wells, essentially for failing to cooperate with
the government over its robosigning practices. After a long battle, the bank
finally agreed to settle last year.
The terms mandated that the bank spend $67 million on a series of measures
to repair its reputation in communities hit the hardest by foreclosures and
robosigning. Enter HomeLIFT.
Under the settlement, Wells had to dedicate $36 million in homeowner
assistance to cities like Fresno, Bakersfield, Detroit, Albuquerque,
Virginia Beach and New Haven. It also mandated $6 million in spending for
credit counseling.
The settlement made the news last year. It may not have been on the front
page, but it was out there. "Wells Fargo settles remaining 'robo-signing'
litigation," reported the LA Times, in one example.
Fast forward to this month. Wells Fargo, fulfilling the terms of the
settlement it fought against bitterly in the lawsuit, launched down payment
assistance programs in cities all over America.
In city after city, Wells executives announced their plans, then patted
themselves on the back for their generosity, always neglecting to mention
the Westland suit.
In the Detroit area, for instance, a Wells spokesman spoke proudly of the
$5.25 million it will be spending on HomeLIFT:
"While the Wayne County economy is showing signs of improvement, many
families have yet to re-enter the housing market because they struggle with
making a down payment," said a seemingly empathetic Russ Cross, a Wells
senior vice president.
"Combined with financial education," Cross went on, "these down payment
assistance grants can make a tremendous difference for people who want to
own a home in one of these five Wayne County cities."
Cross never mentioned that Wells launched HomeLIFT because it had to. The
$5.25 million it spent on HomeLIFT in Detroit was exactly the number
mandated by the Westland settlement.
Detroit Mayor Mike Duggan slobbered all over Wells in a statement about the
program.
"This innovative public-private partnership will make a significant
difference for eligible homebuyers," said Duggan.
It was bad enough that Wells bragged about its court-mandated penance, and
maybe a little worse that local pols helped out with the verbal
ribbon-cutting. But how about the local reporters who chimed in with
positive stories about these altruistic programs?
"Wells Fargo Offers $15K down payment to help home buyers," wrote the
Detroit Free Press. "Potential home buyers in Detroit and other communities
will soon have a new source of down payment assistance."
"Wells Fargo Program Aims to Boost Home Ownership in Wayne County Cities,"
piped in Crain's Detroit Business.
This same pattern repeated itself in virtually every one of the communities
where Wells was forced to make an investment.
"Local Companies Join Forces For Home Ownership," wrote KMOX.com in St.
Louis. The CBS affiliate's story featured a pic of St. Louis Mayor Francis
Slay proudly announcing the $4.75 million HomeLIFT grant. Again, this was
exactly the amount specified in the court settlement.
"New Haven Neighborhood Gets Boost from Wells Fargo Program that Helps
Homebuyers," announced the New Haven Register. The formula was the same as
in St. Louis: Wells Fargo in the headline, plus a photo of the opportunistic
local pol handing out the goodies.
"We know home owners are more inclined to protect their investment and take
care of their property, and they take pride in the result," said Mayor Toni
Harp.
"Wells Fargo to help Fresno homebuyers with $15,000 down payment grant," was
the headline in the Fresno Bee. Same format as all the other cities: Wells
in the headline, and a photo featuring proud Fresno Mayor Ashley Swearengin.
The $7.5 million Fresno program was, again, exactly the amount mandated by
the Westland settlement.
A very few news outlets in some of the cities got it right. The Riverfront
Times in St. Louis, for instance, nailed it. "Wells Fargo is not simply
trying to look good; it is required to try to look good," the paper
reported.
But in most of the cities, the program was presented like a charitable
endeavor, and the local pols seemed to have no problem basking in the ink.
When I contacted Wells about this story, the bank initially seemed offended
at the suggestion it had not been forthright about the impetus behind
HomeLIFT. The new program, its spokesperson Tom Goyda explained, was "part
of several Wells Fargo LIFT programs developed to create positive outcomes
for people and communities recovering from the financial crisis."
A similar program called NeighborhoodLIFT, which Goyda described as a
philanthropic endeavor, had been created years before the Westland suit.
HomeLIFT, he said, was just an extension of that program.
Goyda added that the fact that HomeLIFT and other programs were part of
settlement agreements had "already been covered in the news media" and was
"mentioned in press releases."
That was a surprise to me, since I hadn't seen anything like that in press
releases. When I pressed Goyda for an example of a Wells Fargo press release
admitting that HomeLIFT was part of a court settlement, he replied:
"Our CityLIFT program within the LIFT family was part of a 2012 settlement
with the DOJ and that fact has been included in all CityLIFT releases and
background is provided on the program Website and, as we discussed,
HomeLIFT's ties to the Westland settlement is discussed with city officials
and has been covered by several media outlets previously."
This is confusing, but funny. To deflect attention from one lawsuit, Wells
directed me to a different and worse one.
Back in 2012, Wells Fargo was forced to cough up mega-millions in yet
another settlement, this time with the U.S. Department of Justice.
In that settlement, the department's Civil Rights Division accused the bank
of systematically discriminating against tens of thousands of Hispanic and
African-American homeowners.
Among other things, the Justice Department said Wells charged minority
applicants more - "hundreds of dollars more," on average - for loans than
white borrowers paid.
The DOJ suit was one of many reasons Wells became a poster child for
discriminatory lending. Infamously, one of its loan officers told the New
York Times in 2009 that employees at the company referred to black borrowers
as "mud people" and called subprime lending "ghetto loans."
Anyway, to resolve the government's discrimination charges, Wells in 2012
agreed to $184 million in compensation to borrowers, plus another $50
million in down payment assistance.
The bank's CityLIFT program was created to satisfy the terms of this
settlement. To its credit, Wells Fargo did, at least, publicly admit this
when the program was launched.
But this year, the bank never mentioned anything about this new HomeLIFT
program being part of a court settlement when it sent out releases. The bank
says it did tell all of the mayors who praised the program, but nobody else
was informed that HomeLIFT was penance for robosigning.
And when I called them to ask about this, they pointed to press releases
from their CityLIFT programs years ago - which, if you're keeping score, was
the tab they paid for the other wrong thing they did, the systematic racial
discrimination.
The offices of several of the mayors who participated in this program
declined to comment. But the office of New Haven Mayor Toni Harp was
surprised to learn that the HomeLIFT event to which the city was invited by
Wells Fargo to participate had anything to do with a court settlement.
"Wells Fargo did not make any of that information available to us," said
Laurence Grotheer, a spokesman for Harp.
Grotheer said the mayor was only too happy to participate in the program,
since homeownership, owner occupancy and neighborhood stabilization are
objectives of her administration. "But I had no awareness that its program
was the result of a court order."
"So the city was a full and willing participant," he said. "But I had no
awareness that its program was the result of a court order."
It's hard to get offended, exactly, when a bloodless too-big-to-fail
corporation tries to take credit for something it was forced to do. But that
doesn't mean we shouldn't call them on it.
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Matt Taibbi attending an Occupy Wall Street demonstration at Bryant Park in
New York. (photo: Griffin Lotz/Rolling Stone)
http://www.rollingstone.com/politics/news/wells-fargos-master-spin-job-20151
002http://www.rollingstone.com/politics/news/wells-fargos-master-spin-job-20
151002
Wells Fargo's Master Spin Job
By Matt Taibbi, Rolling Stone
03 October 15
Reporters and politicians are lining up to congratulate Wells Fargo for its
multimillion-dollar neighborhood grant program - but they're leaving out one
small detail
f you still don't believe our brethren on Wall Street have planet-sized
cojones, check out this story.
All over the country, Wells Fargo is making headlines for launching a
multimillion-dollar homeowner assistance program called HomeLIFT, which
among other things offers $15,000 down payment grants to prospective
home-buyers.
Local mayors in big cities from one end of the country to the other are
showing up at ribbon-cuttings and throwing rose petals at the bank for its
generosity. Newspapers in turn are running breathless profiles of the
low-income homeowners who will now get to buy dream homes thanks to the
bank's beneficence.
Some knew, some didn't, but all are leaving out one key detail: Wells Fargo
was forced to launch HomeLIFT.
To understand the background, we have to go back to July 25th of last year,
when a federal judge in the Northern District of California approved a
settlement in a case called City of Westland Police and Fire Retirement
System v. Stumpf. The suit was brought on behalf of shareholders by Robbins
Geller, the same firm featured in a story I wrote two years ago about the
ratings agencies.
For those who are fortunate enough to have forgotten, robo-signing was a
common practice that devastated families during the foreclosure crisis.
People all over the country found themselves booted out of their homes
thanks to bogus affidavits signed by "vice presidents" and "regional
managers," who were often scraggly kids just out of college blindly signing
hundreds of documents a day, if not more.
It was a kind of systematic perjury, and most of the major banks eventually
copped to doing it.
Wells Fargo was one of those banks, joining JPMorgan Chase, Bank of America,
Ally Financial, Citigroup and others in a sweeping $25 billion settlement
with state and federal regulators finalized in 2012.
However, the road to that settlement was not smooth. According to some
stockholders, the company's board of directors failed to cooperate with
investigators throughout the process. A court later found that the Wells
board "opposed discovery requests, filed motions to quash, and refused to
provide details concerning the Company's policies," which made it hard for
investors and shareholders to know what to do about the scandal.
So those shareholders sued Wells, essentially for failing to cooperate with
the government over its robosigning practices. After a long battle, the bank
finally agreed to settle last year.
The terms mandated that the bank spend $67 million on a series of measures
to repair its reputation in communities hit the hardest by foreclosures and
robosigning. Enter HomeLIFT.
Under the settlement, Wells had to dedicate $36 million in homeowner
assistance to cities like Fresno, Bakersfield, Detroit, Albuquerque,
Virginia Beach and New Haven. It also mandated $6 million in spending for
credit counseling.
The settlement made the news last year. It may not have been on the front
page, but it was out there. "Wells Fargo settles remaining 'robo-signing'
litigation," reported the LA Times, in one example.
Fast forward to this month. Wells Fargo, fulfilling the terms of the
settlement it fought against bitterly in the lawsuit, launched down payment
assistance programs in cities all over America.
In city after city, Wells executives announced their plans, then patted
themselves on the back for their generosity, always neglecting to mention
the Westland suit.
In the Detroit area, for instance, a Wells spokesman spoke proudly of the
$5.25 million it will be spending on HomeLIFT:
"While the Wayne County economy is showing signs of improvement, many
families have yet to re-enter the housing market because they struggle with
making a down payment," said a seemingly empathetic Russ Cross, a Wells
senior vice president.
"Combined with financial education," Cross went on, "these down payment
assistance grants can make a tremendous difference for people who want to
own a home in one of these five Wayne County cities."
Cross never mentioned that Wells launched HomeLIFT because it had to. The
$5.25 million it spent on HomeLIFT in Detroit was exactly the number
mandated by the Westland settlement.
Detroit Mayor Mike Duggan slobbered all over Wells in a statement about the
program.
"This innovative public-private partnership will make a significant
difference for eligible homebuyers," said Duggan.
It was bad enough that Wells bragged about its court-mandated penance, and
maybe a little worse that local pols helped out with the verbal
ribbon-cutting. But how about the local reporters who chimed in with
positive stories about these altruistic programs?
"Wells Fargo Offers $15K down payment to help home buyers," wrote the
Detroit Free Press. "Potential home buyers in Detroit and other communities
will soon have a new source of down payment assistance."
"Wells Fargo Program Aims to Boost Home Ownership in Wayne County Cities,"
piped in Crain's Detroit Business.
This same pattern repeated itself in virtually every one of the communities
where Wells was forced to make an investment.
"Local Companies Join Forces For Home Ownership," wrote KMOX.com in St.
Louis. The CBS affiliate's story featured a pic of St. Louis Mayor Francis
Slay proudly announcing the $4.75 million HomeLIFT grant. Again, this was
exactly the amount specified in the court settlement.
"New Haven Neighborhood Gets Boost from Wells Fargo Program that Helps
Homebuyers," announced the New Haven Register. The formula was the same as
in St. Louis: Wells Fargo in the headline, plus a photo of the opportunistic
local pol handing out the goodies.
"We know home owners are more inclined to protect their investment and take
care of their property, and they take pride in the result," said Mayor Toni
Harp.
"Wells Fargo to help Fresno homebuyers with $15,000 down payment grant," was
the headline in the Fresno Bee. Same format as all the other cities: Wells
in the headline, and a photo featuring proud Fresno Mayor Ashley Swearengin.
The $7.5 million Fresno program was, again, exactly the amount mandated by
the Westland settlement.
A very few news outlets in some of the cities got it right. The Riverfront
Times in St. Louis, for instance, nailed it. "Wells Fargo is not simply
trying to look good; it is required to try to look good," the paper
reported.
But in most of the cities, the program was presented like a charitable
endeavor, and the local pols seemed to have no problem basking in the ink.
When I contacted Wells about this story, the bank initially seemed offended
at the suggestion it had not been forthright about the impetus behind
HomeLIFT. The new program, its spokesperson Tom Goyda explained, was "part
of several Wells Fargo LIFT programs developed to create positive outcomes
for people and communities recovering from the financial crisis."
A similar program called NeighborhoodLIFT, which Goyda described as a
philanthropic endeavor, had been created years before the Westland suit.
HomeLIFT, he said, was just an extension of that program.
Goyda added that the fact that HomeLIFT and other programs were part of
settlement agreements had "already been covered in the news media" and was
"mentioned in press releases."
That was a surprise to me, since I hadn't seen anything like that in press
releases. When I pressed Goyda for an example of a Wells Fargo press release
admitting that HomeLIFT was part of a court settlement, he replied:
"Our CityLIFT program within the LIFT family was part of a 2012 settlement
with the DOJ and that fact has been included in all CityLIFT releases and
background is provided on the program Website and, as we discussed,
HomeLIFT's ties to the Westland settlement is discussed with city officials
and has been covered by several media outlets previously."
This is confusing, but funny. To deflect attention from one lawsuit, Wells
directed me to a different and worse one.
Back in 2012, Wells Fargo was forced to cough up mega-millions in yet
another settlement, this time with the U.S. Department of Justice.
In that settlement, the department's Civil Rights Division accused the bank
of systematically discriminating against tens of thousands of Hispanic and
African-American homeowners.
Among other things, the Justice Department said Wells charged minority
applicants more - "hundreds of dollars more," on average - for loans than
white borrowers paid.
The DOJ suit was one of many reasons Wells became a poster child for
discriminatory lending. Infamously, one of its loan officers told the New
York Times in 2009 that employees at the company referred to black borrowers
as "mud people" and called subprime lending "ghetto loans."
Anyway, to resolve the government's discrimination charges, Wells in 2012
agreed to $184 million in compensation to borrowers, plus another $50
million in down payment assistance.
The bank's CityLIFT program was created to satisfy the terms of this
settlement. To its credit, Wells Fargo did, at least, publicly admit this
when the program was launched.
But this year, the bank never mentioned anything about this new HomeLIFT
program being part of a court settlement when it sent out releases. The bank
says it did tell all of the mayors who praised the program, but nobody else
was informed that HomeLIFT was penance for robosigning.
And when I called them to ask about this, they pointed to press releases
from their CityLIFT programs years ago - which, if you're keeping score, was
the tab they paid for the other wrong thing they did, the systematic racial
discrimination.
The offices of several of the mayors who participated in this program
declined to comment. But the office of New Haven Mayor Toni Harp was
surprised to learn that the HomeLIFT event to which the city was invited by
Wells Fargo to participate had anything to do with a court settlement.
"Wells Fargo did not make any of that information available to us," said
Laurence Grotheer, a spokesman for Harp.
Grotheer said the mayor was only too happy to participate in the program,
since homeownership, owner occupancy and neighborhood stabilization are
objectives of her administration. "But I had no awareness that its program
was the result of a court order."
"So the city was a full and willing participant," he said. "But I had no
awareness that its program was the result of a court order."
It's hard to get offended, exactly, when a bloodless too-big-to-fail
corporation tries to take credit for something it was forced to do. But that
doesn't mean we shouldn't call them on it.
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http://e-max.it/posizionamento-siti-web/socialize