Wells Fargo's fair-lending debacle
Beth Jacobsen profited handsomely from the Wells Fargo mortgage machine.
As top producer, she was responsible for roughly $50 million in loans annually, making as much as $700,000 in a good year. Unfortunately, much this was in subprime loans.
The Washington Post offers an interesting profile of the women, who has emerged "as a defining character in the ongoing saga of the country's housing crisis, from the headiest days of the bubble to the current flood of foreclosures. Her scathing affidavit detailing 'the stagecoach to hell' at Wells Fargo is a key part of the groundbreaking lawsuit filed by the city of Baltimore against her former employer. The case spawned copycats across the nation, and federal regulators launched investigations mirroring its allegations. The company flatly denies any wrongdoing, especially when it comes to Jacobson's claims. It calls her testimony misleading at best and, at worst, outright lies."
The most incendiary charges concerns the extent to which African-Americans and other minorities were steered to costly subprime mortgages, even if they qualified for traditional mortgages.
"The consequences are still unraveling. Wells Fargo is under investigation by the Justice Department over alleged fair-lending violations, and it has spent millions of dollars to put similar charges to rest."
For Jacobsen, the fallout has been severe. She has lost her fortune and all her trappings of wealth, including all her real estate. She eventually had a crisis of conscience that led her to repudiate all her work, and testify against the bank, which says that subprime never accounted for more than 10 percent of the business. Jacobsen has also started a new business that helps people work through the modification process and grapple with loans in general. It's unclear to what extent she has sought a payoff under various whistleblower statutes. That might have been a missed opportunity for her.
- here's the article