In sworn court testimony, Beth Jacobson described watching loan officers comb through heavily African-American areas such as Baltimore and Prince George’s County, Md., forging relationships with churches and community groups to sell their members shoddy mortgages. She says she processed loans for homeowners with sterling credit ratings with higher interest rates than they needed to pay. And she says she pumped out millions of dollars in mortgages to people with no paperwork and low incomes, becoming Wells Fargo’s top-producing loan officer.
The Charlotte Observer reported Jacobson said her job in Wells Fargo’s subprime unit was straightforward: Get people approved.
In her affidavit, she said the quickest and most profitable way to make loans was to steer borrowers into the new breed of subprime mortgages. That meant customers were offered subprime mortgages even if they qualified for better interest rates. It didn’t matter if they couldn’t afford the mortgage in the long run. All loan officers were paid by the number of loans they approved, not whether they succeeded, she said.
- It made her the top-producing subprime officer in the country (guess she’s not so proud of that title now).
- She earned $700,000 one year. (More than seven times the company’s stated average for subprime-loan officers in her area).
- She received all-expenses-paid trips to Cancun and the Bahamas.
- She bought a home in Federalsburg, Md., with her husband.
- She bought an investment property down the street.
- She owned vacation house in Virginia.
The 51-year-old Maryland resident has emerged as a defining character in the ongoing saga of the country’s housing crisis, from the headiest days of the bubble to the current flood of foreclosures. Her scathing affidavit detailing “the stagecoach to hell” at Wells Fargo is a key part of the groundbreaking lawsuit filed by the city of Baltimore against her former employer. The case spawned copycats across the nation, and federal regulators launched investigations mirroring its allegations.