Wells Fargo employee who exposed questionable practices faces foreclosure
Published: November 7, 2012
A former Wells Fargo loan officer whose affidavit about company practices played a key roll in multiple lawsuits against the bank says her former employer is retaliating by illegally trying to take her Eastern Shore house in foreclosure.
Elizabeth Jacobson has written to Federal Housing Finance Agency and other regulators, claiming that Wells Fargo, which services the loan on the $529,000 house she bought in 2007, returned all seven of the payments she made under a government-sponsored loan workout. She was scheduled to face a foreclosure hearing on Nov. 5.
“I was denied [a loan modification] five days after the president of Wells Fargo testified before Congress that he had read my affidavit,” Jacobson says. “I contend they singled me out by returning the payments.”
Vickee Adams, a Wells Fargo spokesperson, denies the company singled out Jacobson. “We have practiced extremely responsible—and advocated responsible lending for some time,” Adams says, though she declines to comment on Jacobson’s foreclosure case, which on Monday morning she say has been postponed. “Without going specifically into this instance, for any customer. . . their best option is to reach out to their servicer as soon as possible” to avoid foreclosure.
Jacobson’s affidavit—made part of Baltimore City’s landmark suit against Wells Fargo—said the company paid her and others bonuses for targeting high-interest loans to African-Americans and Hispanics. Wells Fargo settled the case last summer for an estimated $175 million (“Bank Payback,” Mobtown Beat, July 18). The company admitted no wrongdoing. It has always said that Jacobson’s charges were false.
When she worked for Wells, Jacobson said she earned six figures routinely, clearing $700,000 in 2004. After she left the company and blew the whistle, her financial status changed. Today she and a partner operate a foreclosure consultancy company from the Eastern Shore.
“We’re admitted as bank foreclosure examiners and loan securitization auditors,” Jacobson says by phone from the passenger seat of her partner’s car. “In six or seven circuit courts in Maryland we’re admitted as experts.”
Jacobson bought her house in late 2007, as the housing market was poised to crash. It was the third house she and her then-husband, Robert Jacobson, purchased on the Eastern Shore. Jacobson left Wells Fargo shortly thereafter under less-than-copacetic terms. She was still in the mortgage industry, though, and says she didn’t realize how badly the economy was about to crash.
Jacobson had a monthly mortgage payment of about $2,400 on a house on Fairway Lane in Talbot and payments on two other houses in Federalsburg, in neighboring Caroline County. One of those houses had a home equity loan at more than nine percent interest, records show. Jacobson says she was funding her husband’s business venture. “I could afford it at the time,” she says. “If I would have known [the economy would crash], I would have saved more money. I went without income for a year and a half.”
Court records show a welter of debt collection actions against Jacobson dating from 2007. They range from several-hundred-dollar credit card debts to five-figure sums. A dentist has filed to collect $905 from Jacobson and her ex-husband.
Foreclosures on the first of the Federalsburg houses began in 2008, records show. It reverted to the lender the next year. The other came current and went to Jacobson’s husband after their divorce in 2011. Jacobson says that if she knew then what she knows now about the shoddy paperwork loan servicers routinely submit in foreclosure cases, she would have fought the Caroline foreclosures.
In November of 2009, Jacobson applied for a loan modification under the Home Affordable Modification program, known as HAMP. She says she submitted her trial payments of $1,600 per month—the three required by law and then four more to show good faith in a program that was often criticized for delayed administration.
On June 24, 2010, Wells Fargo Co-President Michael Heid acknowledged Jacobson’s affidavit in testimony before Congress, she says. Five days later, Wells Fargo denied her HAMP application, she says, but sent a letter saying it would continue working with her.
Then, on July 6, 2010, Wells Fargo sent Jacobson a check for “misapplication reversal,” she says, totaling all seven of her payments under HAMP. Returning the money is a HAMP no-no, Jacobson says, citing a HAMP FAQ that states, “In no event should the Servicer return the funds to the Borrower.”
Armed with knowledge of sloppy foreclosure practices, Jacobson says she plans to fight her former employer on every front. “I want the foreclosure to be dismissed, then I want to go after Wells Fargo under the civil rights laws,” she says. “The DOJ [Department of Justice] used my affidavit to settle that big lawsuit . . . [then] they left me out to dry.”
> Email Edward Ericson Jr.