The fall-out from the housing crash continues in many different ways.
Foreclosures are still frequent occurrences, especially with so many people struggling in this tough economy. In Hennepin County alone, there were 475 foreclosures in June. Statewide, in the first quarter of 2011, there were 5,364. That's a lot of people losing their homes, and a lot of foreclosed houses pulling down property values.
With the severe slide in home values, many homeowners are underwater on their mortgages. This, in turn, can affect job mobility. After all, it's hard to move to a new place for a job if you can't sell your current house.
And then there is the ongoing reckoning with wrongdoing in the real estate industry that precipitated the housing slump and led to the Great Recession. One episode in this continuing saga was the announcement that Well Fargo will pay an $85 million dollar fine to the Federal Reserve for improper practices in its mortgage business.
The settlement between Well Fargo and the Fed singled out two practices in particular. One was Well Fargo pushing many would-be homebuyers into high-interest loans when they were actually eligible for lower interest rates. The other problematic practice was falsification of underwriting documents by salespeople to give the appearance that certain borrowers were eligible for loans they weren't really eligible for.
The settlement between the Fed and Wells Fargo requires the bank to compensate borrowers who were adversely affected by its practices.
If you believe you were harmed by improper lending practices, talk with an experienced real estate lawyer at our firm to discuss your specific situation.
Source: "Wells Fargo Will Pay $85 Million fine to Settle Fed's Subprime-Loan Claims," Bloomberg, 7-20-2011