Mortgage

What the Wells Fargo scandal means for mortgage borrowers

Bank’s employee cross-selling scheme could have collateral damage for mortgage lending -- here's how to help clients clean up the mess
  • The scandal: Wells Fargo employees allegedly enrolled existing bank customers in other deposit and credit card accounts without their knowledge or consent to meet sales targets.
  • Wells Fargo customers should pull their own credit reports well before applying for a mortgage loan or shopping for a home to identify potential items to dispute.

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When a buyer client sees a news story about something that could affect the home loan, chances are high that real estate agents will be getting some borderline panicked questions in the near future. Fallout from Wells Fargo’s employee cross-selling scandal continues to raise questions about how the bank’s customers were harmed by the illegal scheme -- including their ability to access financial products and services such as mortgage loans. Many real estate agents are wondering what the Consumer Financial Protection Bureau’s (CFPB) recent $185-million consent order against Wells Fargo -- the bureau’s largest penalty to date -- means for the real estate and mortgage industries. New developments surrounding the scandal are reported every day, adding to agents’ confusion. Here’s a breakdown of what happened, how the bank’s customers may have been affected and how agents can work with mortgage brokers to help their clients remove any resulting barriers to th...