“Wells Fargo & Co. has agreed to pay $85 million to settle civil charges that it falsified loan documents and pushed borrowers toward subprime mortgages with higher interest rates during the housing boom.
“The fine is the largest ever imposed by the Federal Reserve in a consumer-enforcement case, the central bank said Wednesday.
“Wells Fargo, the nation's largest mortgage lender, neither admitted nor denied wrongdoing as part of the settlement. The bank agreed to compensate borrowers who were steered into higher-priced loans or whose income was exaggerated.”
Wells Fargo was accused of inflating borrowers' incomes on loan applications from 2004 until 2008. Sales reps also pushed borrowers towards subprime loans, even if they were eligible for lower rate mortgages.
“Between 3,700 and roughly 10,000 people could be compensated under the settlement, the Fed said. The payments will likely range from $1,000 to $20,000.”
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