Wells Fargo to pay $24M to end mortgage probe

   The real estate boom years seem so long ago given the pickle that housing's in but it was only 4 years ago that housing was the road to riches for a lot of Kool-Aid drinking Americans. There's news today concerning Wells Fargo's payoff to eight states to close an investigation into option adjustable rate loans that are contributing to the current malaise. From the AP:

WASHINGTON (AP) -- Wells Fargo is paying $24 million to end an investigation by eight states probing whether lenders acquired by the company made risky mortgages to consumers without disclosing their perils.
The states said loans known as option adjustable rate loans, or "pick-a-payment" mortgages, were deceptive to borrowers. Those particularly toxic loans allowed borrowers to defer some of their interest payments and add them to the principal balance. Borrowers could make payments so low that loan debt actually increased every month.
San Francisco-based Wells Fargo & Co. announced the agreement Wednesday with attorneys general in Arizona, Colorado, Florida, Illinois, Nevada, New Jersey, Texas and Washington state.
The loans were made by Wachovia Corp. and a California company it acquired, World Savings Bank. Wells purchased Wachovia at the end of 2008. Wachovia had already stopped making those loans before the acquisition was complete.

   What the @&*# were the banks thinking back then? That things had changed and this time was different? When the real estate market eventually recovers in the next decade or so and things are looking bright again, the banks will be making these kinds of crazy ass loans once again. You know why? Because memories are short and short term profits will always be on the forefront of profiteering banks.