This “Too Big to Fail” Bank Is Going Down

64 | By Shah Gilani

Last week I told you about “The Coming Curse of Zombie Foreclosures.”

I described how folks – who thought they were foreclosed on – are suddenly finding out they are actually still on the hook for mortgage payments, taxes, and all kinds of maintenance on abandoned homes.

What I didn’t tell you is that the nation’s largest mortgage-issuing bank – and the most profitable bank in 2013 – may have been bitten itself by the very zombie foreclosures it breeds.

And now it could be a dead bank walking.

The bank I’m talking about is Wells Fargo.

The New York Post’s Catherine Curan dropped that bombshell last Wednesday when she was the first to report that bankruptcy attorney Linda Tirelli had unearthed a Wells Fargo “how-to” document that instructs bank attorneys essentially how to commit fraud.

Tirelli filed the 150-page manual in New York’s notoriously no-nonsense and hard-charging Southern District court on behalf of a homeowner in bankruptcy.

The “step-by-step procedure” document instructs Wells Fargo employees how to create (as in just make up out of thin air) an “endorsement” or an “allonge” to prove Wells Fargo is a homeowner’s creditor and therefore has a right to foreclose on the underlying property.

An endorsement is something a lender signs over to a new lender who is taking over the loan or mortgage. An allonge is a string of endorsements attached to a note (mortgage or loan) showing the actual chain of endorsements.

What’s explosive is that this Wells Fargo Foreclosure Attorney Procedures Manual – created November 9, 2011 – “appears to provide step-by-step instructions for a Wells Fargo Home Mortgage ‘Default Docs Team’ and foreclosure attorneys if a blank endorsement is in a file and the attorney wants that note executed,” according to the New York Post.

“In addition, the manual outlines steps for attorneys and the Default Docs Team to create allonges, endorsements to a note on a separate sheet of paper when there is no room left at the bottom of the note.”

Step 3 under the header “Allonge” on page 17 reads: “WFHM Default Docs Team: If file was ordered and received, review to determine what entities the attorney needs the note endorsement to reflect,” says Curan.

What’s sickening and incendiary for Wells is that the how-to-commit-fraud document was last updated in February 2012, which not coincidentally was the same month and year that the nation’s top mortgage lending banks and servicers agreed to a $25 billion settlement for “robo-signing” foreclosure documents to get homeowners out of their homes.

Now it appears that robots aren’t to blame, but lawyers and bank employees committing fraud based on Wells’ how-to manual.

Of course, most of us figured robo-signers weren’t really automaton robots.

But this is big news on account that this document has now been unearthed, brought into the light, and filed in court.

The Southern District of New York is a place a lot of prosecutors who aspire to the governorship of New York – or even the presidency of the United States – seek to make a name for themselves.

Personally, I’m hoping someone over there is repulsed by the zombies and goes after Wells with the intention of burying them on criminal charges.

Like I said, I’m hoping.

I realize the chances of a big bank being brought down for its criminal behavior is somewhere between slim and none.

But hope springs eternal. And spring is just around the corner, or maybe the next corner…

64 Responses to This “Too Big to Fail” Bank Is Going Down

  1. H. Craig Bradley says:

    ALL- IN ( It Together)

    Wells Fargo Bank is not going down ( whatever that means exactly ). If they somehow do, others will be right behind them. So, bank officials lied and docked. You can not charge and sentence a corporation. Sorry, companies don’t go to Club Fed. Don’t tell me other large banks such as B of A ( Countrywide) or U.S. BANK are without sin, because none of them, at least here in America, are exactly squeaky clean. They are all in it together.

    You have an industry that is under the same regulations and the same market forces. Chances are they are all (mis)behaving in a similar manner. In the process, we HAVE become a corrupt nation with the failings that used to be attributed to emerging markets, such as “questionable accounting practices”.

    • Doktor Don says:

      Will close my direct deposit account; along with a Savings Account. If this Story is correct; Warren Buffett will take a bath. Culture of Corruption is beyond repair, on Wall Street. Experts have been warning us for months that the Bubble Economy is due for a catastrophic fall – – maybe, even more devastating than the 1929 Crash. Problem: Everything; is over-leveraged. And, heaven forbid the Hedge Funds and Derivatives Collapse. $200 Trillion will destroy the Economies of the entire World; and, return us to Stone-age, Economies. All of this, likely brought to us by the likes of Goldman Sachs, JPMorgan; and so many more.

    • H. Craig Bradley says:


      A retiree (Southern Pacific Railroad) in my neighborhood named “JIM D.” recently e-mailed me in response to a recent article in the Economist Magazine which stated our Federal Government is still back-stopping the same bank lenders by taking on mortgage risks. It is suggested this kind of Federal government involvement could get us all in trouble once again like it did with sub-prime borrowers 5 years ago. Jim’s question to me reflects a logic and view still tightly held by many older Americans. Lets read:

      Why is everybody still blaming our (financial) institutions for all the sub-prime mortgages leading up to the 2008 crisis instead of blaming all the (fraudulent) borrowers who lied about their income and took out home loans they knew they could not pay for?

      Jim then says he believes ( “thinks”) the new laws Congress has since passed after the financial crisis such as Dodd-Frank have plenty of “safeguards” built-in to prevent another housing-related financial crisis. It won’t happen again, Jim maintains. He evidently thinks we are out of the woods . Well, are we?

      He may have forgotten the causes but has everyone lost their memories? ( Due to age-related senility). Shah, I’ll bet you would disagree with his premise or assumption in view of your various insider articles about banking and investing at the big firms and banks.

      I think Americans simply don’t want to accept the long term damage that was already done, much less the possibility we could be faced with yet another financial crisis someday. Most Wall Streeters are getting record bonuses and bonus pools in 2013. Most investors are “in the money”. Residential real estate is up quite a bit in the last year, as well. So, what could be wrong with individual investor optimism, also at record levels, as well. After all, “Happy Days are Here Again”.

  2. Tc says:

    It wont’ help the property owners though no matter what I lost 5 of my rental properties to them, after giving them a written plan of paying it all back if I could have two years only of a 1% reduced interest rate? No go, I lost my down payments, my income everything and now I see this, It is disgusting.

    • timthewizard says:

      What is even more disgusting is the fact that WF never loaned you one red cent to begin with. See: “Modern Money Mechanics” page 6. Also see: “The Collapse of The American Dream” w(x3)(dot) youtube (dot) com/watch?v=mII9NZ8MMVM. The United States Inc. went into bankruptcy in 1933 (and still is in that BK) and the gold standard was removed from the currency. You might also look up “Where does the fraud begin”. We as a nation can bring the big banks down if we simply stop utilizing their “services”. Enough is enough! This financial terrorism must end!

  3. Stephen says:

    After reading this article, I must ask is this a stock to short. I just recently started following your short recommendations and did not go back on the investing. I now own eight investments that you are shorting but not this one.

  4. sheldonross says:

    Why doesn’t the us government put them out of business? or the banking commission or yourself in a mass suit on behalf of the home owners.
    someone has to do something if their hand is forced.
    How about a large article in the N.Y. times or the Chicago times or the L.A. Times. Get it Done.

  5. Walter Baltzley says:

    There are a number of ways this can go down, and none of them bode well for Wells Fargo…and yes we might just tell them FAREWELL.

    Right now banks are sitting on an arsenal of cash and eyeballing one another like sharks–looking for an opportunity to eat one another. This news could send Wells Fargo stock tumbling, and if they lose enough money in litigation, they might not be able to stave off a “tender offer” or an outright takeover.

    There is no honor among thieves, and banking is a particularly cutthroat business–“in the end, there can be only ONE…”

  6. joel says:

    mr gilani, truly hope something comes out new york, faith in the law is surely at alltime low as banks seem to profit well from criminal behavior. i hope zerohedge picks up on your realizations. still waiting for jon corizine to be prosecuted. thanks

  7. Rick says:

    Great work by Catherine Curan!
    But alas, the gov’t broom will quietly go to work and all these
    criminal violations will end up under the same stinking and smelly
    corrupt carpet they tread upon.
    Or even if some are hand-slapped for being naughty they will be
    rewarded with those gov’t basement jobs as financial consultants
    paid for by all of us who are so sick of the stench of governmentium.

    If some of the loyal readers aren’t familiar with what governmentium is
    I have provided alarming research I received as an attachment.
    No credit to me and no desire to plaguerize (sp) but it is rather good.
    This is copy-paste… not my creation.

    Lawrence Livermore Laboratories has discovered the heaviest element yet known to science.

    The new element, Governmentium (Gv), has one neutron, 25 assistant neutrons, 88 deputy neutrons, and 198 assistant deputy neutrons, giving it an atomic mass of 312.

    These 312 particles are held together by forces called morons, which are surrounded by vast quantities of lepton-like particles called peons.

    Since Governmentium has no electrons, it is inert; however, it can be detected, because it impedes every reaction with which it comes into contact. A tiny amount of Governmentium can cause a reaction that would normally take less than a second, to take from four days to four years to complete.

    Governmentium has a normal half-life of 2- 6 years; It does not decay, but instead undergoes a reorganization in which a portion of the assistant neutrons and deputy neutrons exchange places.

    In fact, Governmentium’s mass will actually increase over time, since each reorganization will cause more morons to become neutrons, forming isodopes.

    This characteristic of moron promotion leads some scientists to believe that Governmentium is formed whenever morons reach a critical concentration. This hypothetical quantity is referred to as critical morass.

    When catalysed with money, Governmentium becomes Administratium, an element that radiates just as much energy as Governmentium since it has half as many peons but twice as many morons.

    • Edward H. Rudberg says:

      Just want to say that your creativity has completely cracked me up.

      It’s sad that there seems to be so much waste in government. Unless strong penalties are administered (such as regarding Wells Fargo) this never-ending cycle of wrong-doers will probably not be thwarted.

      I see no change in banks or bad government practices until it hurts them (punishment), as much as their actions hurt innocent citizens.

    • Warren Bernard says:

      I would be personally interested to know if BOA followed the same procedures being used by Wells Fargo. I believe that I have evidence that they are. If any one has concrete proof of BOA doing this please post it.

  8. R. M. Finlayson says:

    With my assumption that the details, as presented to me, are correct,
    I hope you and many more individuals, then institutions of the US will join
    in prosecuting Wells Fargo, and the many other banks that have had, and
    likely still do have such self serving interests. These things are not only
    wrong, but are evil, and serve to harm all persons. Prosecute to the
    fullest, with good conscience. R.M.F.

  9. Reece Hawkins says:

    Great work Shah, I hope u gave this to FOX news, as they r the only ones who will tell it like it is!

    • fallingman says:

      Is the Pope Argentinian? It’s the biggest holding of America’s friendly face of fascism.

      He doesn’t sell. Remember?

  10. Jim Parker says:

    I find it difficult to believe that a borrower who signed a note that was secured by his home or other property who failed to make payments on that note for whatever reason and subsequently vacated or otherwise abandoned the property would have any right to a claim on the property or be given a waiver under the terms of said note to simply walk away. There is something wrong with the whole picture that has been framed by our government, the courts and our entire legal system. I guess what you folks want is for the bank to simply walk away from the property and let the local community try to condemn it or otherwise quiet the title to it so that it can again be used. Legal technicalities raised in these on-going lawsuits and the subsequent multi-billion settlements simply don’t make sense. Wells Fargo is not responsible for the foreclosure mess..The Fed is!! If we continue on our merry way as seems to be the order of the day, we may well wind up ending mortgage lending and give the far left what it wants–the end of private property ownership!

    • Malcolm Jensen says:

      Asserting that the Fed is to blame for the whole real estate/mortgage bubble/meltdown, is naïve. The criminal efforts by those selling mortgages and the buying without knowing what risks were involved by the big banks (because they were going to slice them up and resell them and retain nearly no risk) had a lot to do with it. Further, if there were to be no mortgages, only the very wealthy would be able to acquire property. Claiming that to be the wish of the far left (if you even have a clue where the far left is these days), is stupid.

    • timthewizard says:

      Jim, with all due respect, you seem not to understand that banks do not loan “money”. They have no “money” to loan. All “money is brought into existence by way of our signature. It is simply a book keeping entry. The banks profit 10x or more the face value of the note so the bank has lost nothing. Each and every bank is engaging in an act of fraud when they claim to “loan” you “money”. See: “Modern Money Mechanics” page 6. Also see: “The Collapse of The American Dream” w(x3)(dot) youtube (dot) com/watch?v=mII9NZ8MMVM. If We The People band together we can stop these criminals from further terrorizing us! Let us take back our country!

  11. Ruth Cotter says:

    One thing comes to mind here. Eric Holder was recently quoted as saying: `There’s no bank too big to be indicted.’ Stern warning for capitalists everywhere.

    • fallingman says:

      You’re kidding, right? Eric “Place” Holder is the court eunuch. The guy has scrupulously avoided prosecuting anybody in the financial world for anything. He says it’s because prosecutions of criminals might cause a loss of confidence in the institutions and provoke a serious market reaction.

      Yeah, probably. That’s what happens when Ponzi schemes are busted. Doesn’t matter. Your job is to prosecute crooks Mr. H.

      But that’s just his cover story. The real reason he does nothing is because he was told to do nothing by the bankers that control him and his boss. Goldman uber alles. All hail JPM. Well Fargo is the least of the criminals and they’re rotten to the core.

      Bankers understand this: You can get away with anything and everything with EPH “on the job.” The rule of law is dead.

    • Ayoola Rasaq says:

      One thing comes to mind here. Eric Holder was recently quoted as saying: `There’s no bank too big to be indicted.’ Stern warning for capitalists everywhere.

      • Malcolm Jensen says:

        Is that the DOJ who have prosecuted nobody for torture or for using lies to push us into the inexcusable war in Iraq? Is that what you mean by prosecuting nobody?

  12. Steve Baze says:

    As you say we can hope? But look at all the crimes that have been committed and nobody was held accountable? Start with the original mortgage debacle and then add in Corzine and MFG ? that is just for starters? It is mind boggling the corruptions and malfeasance that has occurred in the last 10 years or so ? and almost none of it has been accounted for in the slightest manner ? The simple truth is that we now live in a massive system of corruption and a criminal enterprise we call government ?

  13. PETER JONES says:


    • Helen says:

      I am interested in how you got started. I requested a loan modification from BOM, but was denied, I am 63 years old and on a fixed income, I may end up losing my home, and become homeless.


    • timthewizard says:

      I like your spirit Peter, keep it up! I’m right there with you! I too had my home stolen by these criminals. when I learned that banks do not loan “money” because they have no “money” to lend I got fuming mad. See: “modern Money Mechanics” page 6. Also see: “The Collapse of The American Dream” w(x3)(dot) youtube (dot) com/watch?v=mII9NZ8MMVM. I fought them for 3 years until they and their criminal cohorts known as the courts conspired to steal my home, a good portion of my business and several thousands of FRN’s worth of my personal belongings. They may have won this battle but they will not win the war!

  14. Ben Lawrence says:

    I want to thank you for your insights and sharing your experience with me.
    I look forward to more “lessons”.
    Be blessed alsways-

    • Ayoola Rasaq says:

      I want to thank you for your insights and sharing your experience with me.
      I look forward to more “lessons”.
      Be blessed alleyways-

  15. Norbert H. Kmoch says:

    Whistling in the wind. No justice for we the people.
    “What difference does it make?”
    Attorneys everywhere and we hope some of them will be honest and protect this great country. They are all in congress.
    Norb Kmoch

  16. Tom says:

    Thank you, Shah, for making this a “no-brainer”. That’s why I listen to you each and every day…


  17. Prof. Alejandro F. Mérigo R. says:

    Looks like the s..t hits the fan, and white collar crimen will have to pay a price, but in terms of deserved jail time.

    Highly payed bank employees can not run around without a risk of jail for their deliberate malfeasance practice and a crime has been committed, open fraud affecting the weak and innocent. Not fair at all.

  18. Charles says:

    And what happens to our NH Lions Sight and Hearing Foundation investment portfolio of about $850,000 if Wells Fargo were to fail ?

      • timthewizard says:

        Are you kidding me! with that kind of an attitude you are absolutely correct, nothing will happen and these criminals will continue to pillage, rape and plunder us. WAKE UP! Do your homework! See: “modern Money Mechanics” page 6. Also see: “The Collapse of The American Dream” w(x3)(dot) youtube (dot) com/watch?v=mII9NZ8MMVM. We need to be more like ants or bees, they all work together as one, as a community to get the job done. We The People MUST do the same. Together we can bring these criminal to their knees. We can start by simply not using their “services”. If you were to learn of something you believed all your life to be the truth turned out to be a huge lie, do you continue to live that lie simply because it is easy, or do you do something to correct the lie because it is the right thing to do???

  19. Stanley says:

    A New York resident should start a petition asking local prosecutors to start an investigation to identify the individuals who either wrote the manual, approved it, or practiced it’s policies. These individuals should be prosecuted for fraud. Twenty or thirty people serving time in jail will give thought to future potential fraud criminals.

  20. Howard Thomas says:

    Anyone who has actually read the mortgage, of any other financing agreement involving some sort of security such as a house, car, furniture or your favorite t-shirt, there is always a clause that states that you agree to be responsible for any and all costs incurred by the financial organization in the process of repossession and disposal of the property. Those costs can include attorney’ fees, repair costs, etc., etc., and maybe even the cost of printer paper and toner cartridges to print the necessary documents.
    Yes, this attorney may win this case, but some time some where people need to learn to make wise financial decisions, or at least have a survival plan if things start to go bad financially.
    THE NEXT BIG DOG that will be coming out to bite the rear ends of those who have had their houses repossessed and/or filed for bankruptcy will be the IRS. You see, if you lose property through repossession or bankruptcy, any balance owing after the lender sells the security (house, car, etc.) and applies the receipt of sales proceeds as payment against principle, interest and expenses, the remaining balance will be written off by the bank as a loss. That loss will be reported to the IRS and will be considered by them to be your INCOME and therefore will be TAXABLE. Example: You owe $100,000 on a house, it gets repossessed, the bank sells it for $80,000 and they claim $10,000 for expenses. That leaves them $70,000 to apply to the loan balance which results in a write-off of $30,000. In about three years, that’s about how long all this takes, you get a sweet letter from the IRS saying, You owe us $xxxx for taxes on $30,000.

  21. Ken says:

    There are some people and some organizations who are above the law. They can do whatever they want, rob, rape, pillage and plunder, without any fear of reprisal, because they own the system. Remember Michael Milken who went to jail for insider trading. His crime is that he was not big enough. Consider Angelo Mozilo, whose insider trading crime reached almost $750 million. He is too big to prosecute, so he gets out of it scott free. That’s the “American Way”. If you want to break the law, you must first make sure that you are too big to prosecute (TB2P). Wells Fartgo is also in that category, and when they lose enough money, we will have to step in and save their asses. That is also the “American Way.” The real villain here is Keynsian economics. Rome tried it, and look what happened. Read chapter 3 of The Climax of Rome by Michael Grant, and compare with the U.S. over the past century. The Romans must have been able to read the book by Keynes 2,000 years ago. So on addition to computers, they must also have possessed a time machine.

  22. Terry says:

    Are the too big to fail the biggest outlaws in America? Or is the govt printing QE bucks the biggest fraud in history? Or maybe the govt borrowing from the fed itself is the biggest fraud in history? But wait. Maybe it is O care where cheap rates and keep your own plan roam? This one is sanctioned by none other then the SCOTUS, home of “justice” by empathy?

    And except for O and the crats plus a few RHINOs and HRC, who is trying to become relevant, America/s problems are not in the Ukraine or the Crimea. These two are another feeble attempt to divert attention to control the national conversation. Our problems are right here with the O regime.

    Something is missing in PC DC. Regulation of the regulators, including those that scheme up the regulations..

  23. Terry says:

    Are going to have a national Al Capone event? Al went to prison for tax evasion, not for anything else he might have done? Now our govt, embodied by elected officials, might someday go to prison for outlawish activities? Govts are all enablers of political activities because they are all political .orgs.

  24. Mack Ratcliffe says:

    It’s ironic! All the commentary here points up what’s wrong with our government and what should or what needs to be done to stop the disgusting, sickening fraud and corruption of our banks as well as our government. It seems to me that we, the people, have the power to correct most of our concerns by requiring and insisting on accountability and The proper and adequate reprisals administered where indicated with our officials. Polygraph testing for all might be a damn good place to start. We need to know the truth at all times in order to react appropriately. Yet, ironically, through our political voting, we keep giving our government more and more power and abusive control over our lives?? Maybe we all should stop paying income tax until our government wakes up. thank you for listening.l

  25. kevin says:

    More power to the ones who challenge
    Let the courts be full of cases against bankster-hoods
    If the DoJ has it’s say,
    Bankster-hoods will not pay
    with jail time and that’s the only way
    To bring this sad saga to a timely end

  26. June McArthur says:

    Thank you Shah for finally reporting the truth behind these banks and servers cruel, heartless illegal practices all in the name of the almighty dollar. In the past, I have never criticized our Fed. but it is difficult not to now. After working for income for 50 years (am 65 yrs.) I had BOA take my home I had owned since 1990 without the past legal must that I was to be informed of the court date. I was not informed and the home was foreclosed without my knowledge. How’s that for the good ole USA free country.

  27. Sammi1960 says:

    OK so here’s the $64,000.00 question

    I work for WF, I process claims in a completely different department.

    SO I am supposed to
    Quit my good paying job that has healthcare benefits and keeps my family in grpceries and a house.
    CLose my bank accounts with them and hope and Pray Uncle Barrack will feed, & cloth me, take care of my medical under the Affordable Care Act and step in to keep me from being tossed out of my house?

    It’s all well and good to tell us what’s wrong and how to protest against it.

    We the American people do need a practical alternative, so Bitcoin is it?

    I don’t think so folks. Try again

Leave a Reply

Your email address will not be published. Required fields are marked *