Rapid-fire foreclosures alleged at Wells Fargo

Wells Fargo & Co. mortgage loan processors have acknowledged signing hundreds of foreclosure documents a day without verifying the information's accuracy, calling into question the bank's assertion that it did not make errors in documents used to evict people from their homes.

A Wells Fargo vice president in South Carolina said she signed "anywhere between 300 to 500" foreclosure documents over a two-hour period each day, without verifying much of the information. A second Wells Fargo employee said he signed 50 to 150 foreclosure documents a day, verifying only the dates.

The employees made the comments in depositions, or sworn testimony, as part of lawsuits disputing foreclosure actions initiated by Wells Fargo. The comments have raised concerns that Wells Fargo, the nation's largest home lender, may have cut corners like other large banks to process a massive influx of foreclosures.

Minnesota Attorney General Lori Swanson and other state regulators have called on large banks to stop foreclosures until they can ensure they are being done properly. On Thursday, all 50 states and the District of Columbia launched a joint investigation into whether banks and loan servicers used false documents and signatures to justify hundreds of thousands of foreclosures.

Banks face accusations that they were in such a rush to process foreclosures that they were "robo signing" hundreds or thousands of foreclosure affidavits a day without verifying their accuracy.

Since allegations of foreclosure impropriety emerged late last month, Wells Fargo has stood virtually alone among the giant mortgage lenders in insisting it did nothing wrong. On Wednesday, the San Francisco-based bank issued a statement saying its affidavit procedures and daily auditing demonstrate that its foreclosure affidavits are accurate.

Meanwhile, Bank of America, J.P. Morgan Chase and Minneapolis-based GMAC Mortgage, three of the nation's top six mortgage lenders, have all said they would temporarily halt foreclosure sales in certain states as they review potential flaws in their procedures. Charlotte, N.C.-based Bank of America went the farthest, freezing foreclosure sales in all 50 states.

However, Wells Fargo's procedures have come under closer scrutiny in recent weeks. Some consumer attorneys who represent people who have lost their houses argue that the bank's employees made some of the same missteps as its rivals by carelessly rushing foreclosures without verifying the accuracy of the documents.

Linda Tirelli, a consumer bankruptcy attorney in Connecticut and New York, calls the bank's statement that its affidavits are accurate "absolutely outrageous."

The attorney said a Wells Fargo vice president recently "manufactured" a transfer of mortgage from Washington Mutual to Wells Fargo, after initiating foreclosure proceedings against her client.

Tirelli said she could tell the document was fake because the Wells Fargo employee, Herman John Kennerty of South Carolina, signed the document in July of this year, nearly two years after Washington Mutual ceased to exist.

In a deposition taken in May involving a Washington homeowner, Kennerty said he signed 50 to 150 foreclosure documents a day, verifying only that the dates on the documents were accurate and consistent with the date of his signature. Kennerty said he relied on co-workers to make sure the information was accurate.

Adams, the Wells Fargo spokeswoman, said the statements by Wells Fargo employees do not suggest the foreclosures should not have happened. She said the Washington homeowner's lawsuit was dismissed, confirming the foreclosure was valid. "A deposition does not suggest a wrongful foreclosure," she said.

The testimony against Wells Fargo in these cases does not appear as dramatic as what's been uncovered at other lenders. In a deposition, an employee at GMAC said he oversaw a team of 13 people who signed about 10,000 affidavits a month without verifying their accuracy. The affidavits were then used to complete the process of repossessing homes and evicting residents.

Peter Ticktin, a Florida attorney, says he's deposed 150 employees who say they've signed foreclosure affidavits without actually reading them. "These fraudulent affidavits are pervasive," he said. "They are not the exception. They are the rule."

The allegations of rushed foreclosures could compel thousands of people across the country to challenge their foreclosures, delaying sales of houses and possibly prolonging the mortgage crisis, say experts. Together, Wells Fargo, Bank of America and J.P. Morgan Chase have a staggering $56 billion of their own one-to-four family home loans in foreclosure, plus they are servicing another $179 billion in foreclosed home loans for other lenders, according to SNL Financial of Charlottesville, Va.

On Wednesday, J.P. Morgan Chase executives said they will review about 115,000 loan files in 41 states. The bank's chief financial officer, Douglas Braunstein, said in a conference call that the bank was confident that "underlying foreclosure decisions were justified," but he warned that it could take several weeks to go through all the files.