September 2016

#1 U.S. Mortgage Bank Wells Fargo “forgoes” Client Protection

#1 U.S. Mortgage Bank Wells Fargo “forgoes” Client Protection

Breaking News: Big Bank Safe & Secure Stereotype Challenged

Yesterday the #1 U.S. Mortgage Bank Wells Fargo was caught in a scandal for their aggressive cross-selling tactics and got fined $185 million with a $5 million payout to customers who were affected by their actions.

The Consumer Financial Protection Bureau (CFPB), a Federal agency that polices banks, lending institutions and and other financial companies to protect consumers, stepped in to investigate.  

A complaint was filed in May 2015 in California alleging Wells Fargo for pushing customers into “costly financial products that they did not need or even request”. (REUTERS)

The investigation revealed that the bank incentivized aggressive sales goals for their employees resulting in a lack of client protection – over 2 million deposit and credit card accounts were fraudulently opened.  

Our Focus: Client Protection

These findings point a spotlight on our broken banking system.  Client Protection was the main reason why we decided be the First Non-Commissioned Home Loan Lender.  A major part in the equation was to make this transition and provide clients honest and un-incentivized advice from our salaried Home Loan Advisors.

The other part was to educate clients so they knew about the home buying process and understood what they should buy, not can buy.  We developed two innovative tools to support our mission to educate, protect and empower clients.  

Our True Affordability Calculator helps clients prepare for homeownership by detailing lifestyle expenses that aren’t recorded on a credit report.  Our Rent vs. Buy calculator compares whether it made financial “cents” to purchase a home or to actually continue paying rent.

Who Can You Trust? Seek Your Best Interest

Our best advice to clients is to truly vet multiple lending institutions and other professionals to feel comfortable.  Michael Sema gives important tips and interview questions in another key post about picking your home buying pros

Interview them, ask questions, see what they can offer you because pride of homeownership should never be at the cost of sacrificing happiness.

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