California’s Attorney General Edmund G. Brown Jr. announced today that Wells Fargo (WFC) has agreed to provide loan modifications worth more than $2 billion to thousands of California homeowners with “pick-a-pay” loans and to pay an additional $32 million to thousands of borrowers who lost their homes through foreclosure.
In a press release Mr. Brown’s office said that “”none of the loans were made by Wells Fargo. All were originated by World Savings and Wachovia, banks Wells Fargo acquired.”
“Customers were offered adjustable-rate loans with payments that mushroomed to amounts that ultimately thousands of borrowers could not afford,” Brown said. “Recognizing the harm caused by these loans, Wells Fargo accepted responsibility and entered into this settlement with my office.”