Wells Fargo 2012 Annual Report Download - page 193

N.A. from 1993 to May 31, 2012 has been certified. The Court has
scheduled a trial in this case for May 6, 2013. A second, related
case is also pending in the same Court. On July 8, 2008, a class
action complaint captioned Stacey and Bradley Petry, et al., v.
Wells Fargo Bank, N.A., et al., was filed. The complaint alleges
that Wells Fargo and others violated the Maryland Finder’s Fee
Act in the closing of mortgage loans in Maryland. The Court
certified a plaintiff class of borrowers whose loans are secured by
Maryland real property, which loans showed Prosperity
Mortgage Company as the lender receiving a fee for services, and
were funded through a Wells Fargo line of credit to Prosperity
from 1993 to May 31, 2012. The Court has scheduled a trial in
this case for March 18, 2013.
MORTGAGE-BACKED CERTIFICATES LITIGATION Several
securities law based putative class actions were consolidated in
the U.S. District Court for the Northern District of California on
July 16, 2009, under the caption In re Wells Fargo Mortgage-
Backed Certificates Litigation. The case asserted claims against
several Wells Fargo mortgage backed securities trusts, Wells
Fargo Bank, N.A. and other affiliated entities, individual
employee defendants, along with various underwriters and
rating agencies. The plaintiffs alleged that the offering
documents contain untrue statements of material fact, or omit to
state material facts necessary to make the registration
statements and accompanying prospectuses not misleading. The
parties agreed to settle the case on May 27, 2011, for
$125 million. Final approval of the settlement was entered on
November 14, 2011. Some class members opted out of the
settlement, with the most significant being the Federal National
Mortgage Association (Fannie Mae) and the Federal Home Loan
Mortgage Corporation (Freddie Mac).
On June 29, 2010, and on July 15, 2010, two complaints, the
first captioned The Charles Schwab Corporation vs. Merrill
Lynch, Pierce, Fenner & Smith, Inc., et al., and the second
captioned The Charles Schwab Corporation v. BNP
ParibasSecurities Corp., et al., were filed in the Superior Court
for the State of California, San Francisco County against a
number of defendants, including Wells Fargo Bank, N.A. and
Wells Fargo Asset Securities Corporation. As against the Wells
Fargo entities, the new cases assert opt out claims relating to the
claims alleged in the Mortgage-Backed Certificates Litigation.
On October 15, 2010, three actions, captioned Federal Home
Loan Bank of Chicago v. Banc of America Funding
Corporation, et al. (filed in the Cook County Circuit Court, State
of Illinois); Federal Home Loan Bank of Chicago v. Banc of
America Securities LLC, et al. (filed in the Superior Court of the
State of California for the County of Los Angeles); and Federal
Home Loan Bank of Indianapolis v. Banc of America Mortgage
America Securities, Inc., et al. (filed in the Superior Court of the
State of Indiana for the County of Marion), named multiple
defendants, described as issuers/depositors, and
underwriters/dealers of private label mortgage-backed
securities, in an action asserting claims that defendants used
false and misleading statements in offering documents for the
sale of such securities. Plaintiffs seek rescission of the sales and
damages under state securities and other laws and Section 11 of
the Securities Act of 1933. Wells Fargo Asset Securities
Corporation, Wells Fargo Bank, N.A. and Wells Fargo &
Company were named among the defendants. On April 20, 2011,
a case captioned Federal Home Loan of Boston v. Ally
Financial, Inc., et al., was filed in the Superior Court of the
Commonwealth of Massachusetts for the County of Suffolk. The
case names, among a large number of parties, Wells Fargo &
Company, Wells Fargo Asset Securitization Corporation and
Wells Fargo Bank, N.A. as parties and contains allegations
substantially similar to the cases filed by the other Federal Home
Loan Banks.
In addition, there are other mortgage-related threatened or
asserted claims by entities or investors where Wells Fargo may
have indemnity or repurchase obligations, or as to which it has
entered into agreements to toll the relevant statutes of
limitations.
MORTGAGE FORECLOSURE DOCUMENT LITIGATION Eight
purported class actions and several individual borrower actions
related to foreclosure document practices were filed in late 2010
and in early 2011 against Wells Fargo Bank, N.A. in its status as
mortgage servicer or corporate trustee of mortgage trusts. The
cases were brought in state and federal courts. All eight cases
have been dismissed or otherwise resolved.
MORTGAGE RELATED REGULATORY INVESTIGATIONS
Government agencies and authorities continue investigations or
examinations of certain mortgage related practices of Wells
Fargo. Wells Fargo, for itself and for predecessor institutions,
has responded, and continues to respond, to requests from
government agencies seeking information regarding the
origination, underwriting and securitization of residential
mortgages, including sub-prime mortgages. On
February 24, 2012, Wells Fargo received a Wells Notice from
SEC Staff relating to Wells Fargo’s disclosures in mortgage-
backed securities offering documents. On November 20, 2012,
the SEC Staff advised Wells Fargo it did not intend to take action
on the subject matter of the Wells Notice.
IN RE MUNICIPAL DERIVATIVES ANTITRUST LITIGATION
Wachovia Bank, along with several other banks and financial
services companies, was named as a defendant beginning in
April 2008 in a number of substantially identical purported class
actions and individual actions filed in various state and federal
courts by various municipalities alleging they have been
damaged by alleged anticompetitive activity of the defendants.
These cases were either consolidated under the caption In re
Municipal Derivatives Antitrust Litigation or administered
jointly with that action in the U.S. District Court for the
Southern District of New York. The plaintiffs and Wells Fargo
agreed to settle the In re Municipal Derivatives Antitrust
Litigation on October 21, 2011. The settlement received final
approval on December 14, 2012. A number of municipalities
have opted out of the settlement, but the remaining potential
claims are not material.
ORDER OF POSTING LITIGATION A series of putative class
actions have been filed against Wachovia Bank, N.A. and Wells
Fargo Bank, N.A., as well as many other banks, challenging the
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