Regardless of the bank’s efforts to burke a juicy scandal within the consumer department,which took place last year, leading officials in the company have been accusedofmaking unauthorized mortgage business transactions belonging to the similar firm. It involves their implication in unlawful transitions to the particular home loans as detailed by the customers. It, therefore, leads to the rise of the first-hand action as well as to the other relative lawsuits, including penalties and other compensations.
Fact of the Matter
According to reports, the unauthorized transitions as subjected by the company’s officials ended up being a surprise to most of the customers. In one of the communication that involved a paramount customer of the firm, he pledged on how such a change would lead to the decline of their loan payments that should take place each month.
In his view, David explained how such a change would be a disadvantage to the long-term consumers, while on the other end, subjected towards benefiting the borrowers only. To be specific, the borrowers who are deemed to benefit more from the transition are mainly those who are currently facing bankruptcy and any other related issues that are against the expected policies of the bank.
Digging deep into the details of this business article by the New York Times, research has shown that Wells Fargo’s alterations would eventually lead to the heightening of the borrower’s terms of loan repayment, by a period estimated to last for a decade. By being at a position of paying back the given loan after a period of ten years, the chances are high that the select consumers would still be in a position of having long term monthly payments, which would, in turn, benefit the bank as the interest to be paid back would heighten significantly.
Should there occur any given alteration regarding a person’s payment outlay, the chances are high that it is a subject that needs a form of consent from the court. About the assertions as filed by the lawsuits, Wells Fargo is somewhat inclined towards the making of fundamental alterations, in the absence of a legal trial.
Further Details
Nevertheless, according to close sources that relate with the bank, it is said that the alteration is part and parcel of a modification process that eventually involves a trial loan. Despite the process being seen as a test procedure, it is much important for the bank to realize that from a given point of view, they are inclining the borrowers towards greater extended risks.
Their acts can be seen as being an ultra-virus, as the actions are somewhat against the initial commitments that they made to the courts. As a result of this, chances are much higher that the bank could be susceptible to foreclosure anytime soon.
The bank needs to act swiftly so as to avoid the relative chances of looting the clients. According to one client, the bank faces accusations that the borrowers themselves had indulged and appraised the modification itself. It is not right since, in most of the situations, trustees who are involved in handling payments for the consumers who faces bankruptcy charges would eventually give in to such a change.
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The above article shades light on how we should act and behave in a business environment. It is an item that each in any business organization needs to look at and internalize so as to take the necessary action in case your situation looks similar to that. The most important key to note is that scandals are prone to occur in any institution.
The Consequences of the Case
These scandals and even controversy can be caused by employees or the individual in the senior-most positions within the organization. It would not be a wonder therefore if the people you believe in are found guilty of illegal acts in your firm. In our case of study, for example, it was revealed that the leading officials are the ones who were engaging in unlawful acts. This scenario is not only dangerous and risky but also a threat to the future of an organization. In the first place, it attracts the lawsuit that will cost the company.
Secondly, the reputation of the business is diminished such that your name does not appear on top of the papers any longer.
Thirdly, the fact that it is the senior officials who are involved in the scandal demoralizes it, customers. The impact is felt with gravity than when it was just a matter of mere employees. Once a client is discouraged, he or she loses trust in the company and may opt to retreat. For instance, in this scenario, a customer says that the lack of integrity in the top management contributed significantly to their delay to clear their loans in time.
More so, any time a scandal arises in a company; it is not in favor of the customers in most cases. As a result, they would feel a sense of betrayal because the firm would have acted against the initial commitment. The company stands higher chances of losing its loyal customers. As a result, it may go to liquidation because the loan debtors may boycott repaying their loan dues.
Therefore, before the business can engage in any act, let the management the risk of undertaking such course of action. Also, it is always safe to be on the right side of the law. Unlawful deals should be avoided with zero tolerance since its impacts are never pleasing. Research indicated that a good name that has been for decades could fade in just a few seconds once the words of the scandals drop in the ears of its clients.
Smith