Many American have a tough time getting a good deal with their mortgage, and shopping around for the best deal requires a great deal of work. For 10,000 Wells Fargo customers, however, they were blatantly cheated out of a better interest rate by Wells Fargo itself.According to the Federal Reserve, Wells Fargo was altering customer's information on documentation applying for a mortgage. They changed customers' incomes and other financial information, and they would offer the customers higher interest rates even though they qualified for a lower rate. Wells Fargo is continuing to deny any wrongdoing, but the Federal Reserve has ordered that Wells Fargo pay an $85 million fine and give further compensation to the thousands of Wells Fargo affected.
This is greed at its ugliest. Thousands of homeowners could have had a lower interest rate on their mortgage, and instead, Wells Fargo allegedly encouraged them to take subprime loans that cost their customers substantially more. If the Federal Reserve's allegations are true, then consumers cannot know whether to trust anything their bank tells them. Consumers trust their banks when they apply for a loan, and they believe that their bank will give them a fair rate. The rate might vary slightly from lender to lender, but their bank won't work actively against the customer's best interests. Even if the allegations turn out to be false, many customers will have lost trust in their bank (if they haven't already) and will be more reluctantly to believe anything their bank tells them.
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