There is a meme about the brazenness of a man convicted of murdering his parents begging for mercy from the court because he’s an orphan.
Wells Fargo has topped that bit of audaciousness. Matt Taibbi, writing in Wells Fargo’s Master Spin Job for Rolling Stone, ledes:
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.
Yes. Wells Fargo got nailed for robosigning and lost the court battle in City of Westland Police and Fire Retirement System v. Stumpf. The fallout from that loss 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.
Wells Fargo had to be dragged kicking and screaming to the settlement and now the bank’s flacks have the balls to try and turn the court-mandated expenditure into a public-relations coup.
I checked the local news in Cleveland and there doesn’t appear to be any recent mention of HomeLIFT. As Taibbi notes, however, there was an earlier program, resulting from an earlier lawsuit: CityLIFT.
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.
While HomeLIFT doesn’t appear to be on Cleveland’s radar, CityLIFT is. Two years ago Olivera Perkins, writing in Homebuyers in Cleveland can get $15,000 toward down payment for the Plain Dealer told readers:
Homebuyers in the City of Cleveland may qualify for $15,000 in down payment assistance funding resulting from a federal mortgage settlement.
Wells Fargo is making $3.7 million available through its CityLIFT program.
Perkins gets points for putting the settlement in the lede and for additionally informing readers:
The money comes from a 2012 settlement between Wells Fargo and the U.S. Department of Justice regarding whether some Wells Fargo mortgages had adversely impacted African-American and Hispanic borrowers.
The same year, the lender was part of the $25 billion national mortgage settlement reached between the federal government and 49 state attorneys general and the nation’s five largest mortgage servicers: Ally/GMAC, Bank of America, Citi, JPMorgan Chase and Wells Fargo.
The agreement settled state and federal investigations finding that these servicers routinely signed foreclosure-related documents without a notary public and without confirming if the information in such documents was correct. Both practices are against the law.
Matt Taibbi was away from us for too long working for First Look Media, the Glenn Greenwald/Pierre Omidyar startup. I had high hopes for that partnership since I greatly admire both Greenwald and Taibbi, but disagreements happened and Taibbi returned to Rolling Stone.
I’m very happy that he’s back.