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Attorney: Wells Fargo foreclosure manual violates rules

New information from a financial investigation shows that banking giant Wells Fargo allegedly created a large manual on sidestepping federal regulations during foreclosures. It is not clear whether residents in the Washington, D.C., area were affected by the use of this manual, but experts say that the abuse could be widespread. Although Wells Fargo denies the existence of the 150-page manual, a bankruptcy lawyer in New York said the bank is still using the predatory foreclosure tactics that prompted a $25 billion nationwide mortgage settlement after the recession.

The allegations center around a guide that was supposedly used by Wells Fargo attorneys to process foreclosures without the inclusion of an important document. That document, called an endorsement, essentially proves that the lender has been administering the mortgage. A New York attorney said that she found the de facto guide to mortgage fraud during an investigation related to a foreclosure case in that state.

That attorney and others throughout the nation say that Wells Fargo is known for its suspicious documentation practices. While she was defending some other clients, the woman said, she would notify the bank that some documents were missing. In several cases, those documents would suddenly appear, allowing the foreclosure to proceed.

Attorneys for the bank say that their lawyers are complying with legal regulations. Wells Fargo said that it has continued to update its foreclosure manuals during and after the mortgage fraud investigation that led to the multi-billion dollar settlement. A formal investigation may be pending into the contents of that manual.

Victims of mortgage fraud and other foreclosure violations may benefit from the assistance of a local bankruptcy attorney. Banks are not always honest in their dealings with underwater homeowners. In those cases, a bankruptcy attorney may be able to protect clients' interests by determining whether the bank acted appropriately. A bankruptcy attorney is a valuable ally for those who want to pursue stopping foreclosure.

Source: The Washington Post, "Wells Fargo foreclosure manual under fire" Danielle Douglas, Mar. 17, 2014

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