Jerry Brown Announces $2 Billion Settlement with Wells Fargo

Hope you've got room in there for the billions you owe Californians...

​The office of Attorney General Jerry Brown announced today that Wells Fargo has agreed in a settlement to offer home-loan modifications worth $2 billion, and will also pay $32 million in restitution to borrowers who lost their homes through foreclosures.

According to a statement from the AG's office, the loans at issue were made not by Wells Fargo but by Wachovia, which the company acquired in 2008; and World Savings, bought by Wachovia in 2006.

"Customers were offered adjustable-rate loans with payments that mushroomed to amounts that ultimately thousands of borrowers could not afford," Brown said in the statement, adding, "Recognizing the harm caused by these loans, Wells Fargo accepted responsibility" for the prior actions of banks it obtained.

An estimated 14,900 borrowers in California with adjustable-rate mortgages stand to be affected by the coming loan modifications, according to Brown's office, as well as some 12,000 homeowners evicted through foreclosures who could benefit from the restitution payments.

California is the latest in a string of states that have struck legal settlements with Wells Fargo over harmful home loans, including Arizona, Florida, Texas, and Washington.

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