Wells Fargo “Lending” Securities It Didn’t Own

This is why there is over $11 TRILLION in UNREGULATED MBS DERIVATIVE debt when there are only 100 million mortgageable properties in the U.S. housing universe. Securitization and rehypothecation have taken down the American Dream and creamed Fannie & Freddie.

Livinglies's Weblog

Translation: WFB was the “custodian” of alleged “mortgage-backed” certificates issued for the benefit of investors who paid billions of dollars for ownership of the certificates. WFB “Loaned” those alleged securities to brokers. The brokers in exchange provided “collateral” the proceeds of which were reinvested by WFB. In short, WFB was laundering the investors money for the sole benefit of WFB and not for the investors who owned the certificates and certainly to the detriment of the brokers and their buyers of derivative instruments based upon the loan of the securities.

This case reveals the flowering of multiple levels arising from false claims of securitization. First WFB issues certificates from a fictitious trust that owns nothing. Then it keeps both the money paid for those certificates and it keeps the certificates as well. On Wall Street this practice is called holding securities in “street name.” Then WFB engages in trading on…

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One thought on “Wells Fargo “Lending” Securities It Didn’t Own

  1. WFB was caught red handed here in Baltimore targeting minorities for subprime loans when to the contrary said minorities qualified for prime. The City of Baltimore brought suit about 12 years ago. WFB settled. But WFB is greedy and believes they are above the law and can do what they want – apparently this is true. Where is WFB now? Still here in Baltimore with ATMs on every corner in every convenience store in underserved neighborhoods. They may not be using the WFT logo but trust and believe they are the ones putting the cash in those machines.

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