Wells Fargo can’t find the checks from mortgage holders, and a judge finds that a problem …

Noting that Wells was a big backer of a law change that allows banks to stop returning canceled checks, The NY Times’ Gretchen Morgenson shows what can happen. The bank lost track of payments with the result that at least some mortgage holders were facing foreclosure.

But Sidney B. Brooks, the judge overseeing the case, was clearly dismayed by the bank’s performance, she writes.

“This is a major lender/mortgage loan servicer where the left hand does not know what the right hand is doing — the collection department does not know what the check processing and accounting departments are doing.”

Because this is not the first time the judge has encountered problems in Wells Fargo’s operations, he is considering sanctions on the bank.

“This dispute might portend a widespread abuse of collection practices or creditor overreaching,” he wrote, “demanding of debtors what it, the creditor itself, is unable to provide: accurate and reliable record keeping and billing practices.”
The US could see banks in for a major bout of new regulation.

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