Wells Fargo Agrees to Compensate Borrowers
Wells Fargo & Co. has reached an agreement with the state of California to pay more than $2 billion to compensate more than 12,000 borrowers who lost their loans because they defaulted on Pick-A-Payment loans.

"Customers were offered adjustable-rate loans with payments that mushroomed to amounts that ultimately thousands of borrowers could not afford," California Attorney General Jerry Brown said in a statement. "Recognizing the harm caused by these loans, Wells Fargo accepted responsibility and entered into this settlement with my office."

The loans were originated by Wachovia Corp. and Golden West Financial Corp. Wells Fargo acquired those companies. Wells has entered into similar agreements in nine other states.

Source: Charlotte Observer, Rick Rothacker (12/21/2010)