Bad Behavior In Lending: Sham Job Interviews, “Rampant” Fraud


Alleged bad behavior and fraudulent activity in the mortgage industry have made news headlines in recent years and despite attempts to get lending leaders to shape up their ships, at least one person who reports on these issues says problems are common, even “rampant.”

One of the most recent examples of these alleged incidents involved sham job interviews for Black and female candidates at Wells Fargo & Company.

Wells Fargo in California has approximately $1.9 trillion in assets. They serve one in three U.S. households and more than 10% of small businesses in the United States.

According to former executive Joe Bruno, company leaders at Wells Fargo allegedly put minority candidates through the interview process for positions that had already been promised to others. Bruno worked in the wealth management division of Wells Fargo’s corporate offices in Jacksonville, Florida.

His ouster, Bruno asserted, came on the heels of lodging complaints over the matter to his superiors.

The New York Times reported Bruno told his superiors the “fake interviews” were “inappropriate, morally wrong, ethically wrong.”

Those handling the case for Wells Fargo claim Bruno was let go for retaliation against a colleague.

While the matter was under federal investigation, Wells Fargo issued a statement, without referring to the investigation, extolling diversity statistics for its workforce and practices for filling executive positions, according to

On August 1, Wells Fargo put a press release out on the business wire which announced they were reinstating their diverse candidate slate guidelines following a pause that started in June.

“Over the past six weeks, the company completed a review of diverse candidate slate hiring approaches and interviewed Wells Fargo recruiters and hiring managers to determine what’s working and what’s not. The company has also engaged a broader set of employees in listening sessions since mid-May,” the press release said.

Bei Ling, Wells Fargo’s chief human resources officer, said they are recommitting to diverse candidate slate guidelines with changes that will help clarify and simplify the process and lead to a better experience for all candidates, internal and external.

“We began this exercise knowing that diverse candidate slates work, and that they are a common, good practice across multiple industries,” Ling said in a statement. “Wells Fargo has seen measurable increases in diverse representation over the past several years, and we believe that diverse candidate slate guidelines have been one of the many contributing factors. Our review helped us to identify opportunities where we can further improve how the guidelines are implemented.”

The press release said the company would be resuming the application of the guidelines with some changes on Aug. 19. They will continue to hold senior leaders accountable for making progress on diverse representation while providing training for recruiters and managers.

According to the press release, in 2021, external hiring of individuals from underrepresented racial and ethnic groups increased by 27 percent.

Between 2020 and 2021, external hiring of women in the U.S. increased 23 percent, according to the press release.

Wells Fargo is not the only lending leader that has been spotlighted in the news for alleged bad behavior.

California-based mortgage lender American Financial Network agreed to pay $1,037,145 to resolve allegations that it improperly and fraudulently originated government-backed mortgage loans insured by the Federal Housing Administration. Officials at the U.S. Department of Justice issued a press release on the matter in June.

“FHA-backed mortgages are a critical resource for first-time homebuyers, moderate-income borrowers, and families who have suffered negative credit due to the pandemic or other events out of their control,” U.S. Attorney Vanessa Waldref said in a statement. “By improperly originating ineligible mortgages, lenders take advantage of the limited resources of the FHA program and unfairly pass the risk of loss onto the public.”

According to the press release, this case began in March 2019 when a whistleblower – a former loan processor with AFN – filed a qui tam complaint under seal in federal court in Spokane, Washington.

The settlement was the result of a joint investigation conducted by the U.S. Attorney’s Office for the Eastern District of Washington, HUD’s Office of Inspector General, and the U.S. Department of Veterans Affairs, Office of Inspector General, Spokane Resident Office.

In April of 2021, officials at the U.S. Department of Justice announced that the founder and former chief executive officer of Live Well Financial, Inc., was convicted of securities fraud, wire fraud, and bank fraud charges in connection with a scheme to fraudulently inflate the value of a portfolio of bonds owned by the company.

Live Well was a Virginia-based company that originated, serviced, and securitized government-guaranteed reverse mortgages known as Home Equity Conversion Mortgages.

Manhattan U.S. Attorney Audrey Strauss said at the time that Michael Hild obtained millions of dollars in secured loans for Live Well Financial by grossly inflating the value of bonds used as collateral. 

Hild deceived a third-party pricing service by providing it with inflated marks, resulting in the pricing service publishing valuations for the bonds far in excess of market value, according to Strauss.  

“Lenders were hoodwinked into lending far more than they otherwise would have.  The house of cards came crashing down with the unwinding of Live Well and the revelation to lenders that the bond portfolio had been overvalued by $200 million,” Strauss said in a statement.

In August, Editor Michael Schwartz of Richmond BizSense reported that Hild is still fighting to have the guilty verdict overturned. Live Well’s bankruptcy liquidation remains ongoing, Schwartz wrote.

In 2020, LendingTree divulged that ex-employees were accused of sharing passwords with other mortgage lenders. Three southern California lenders were named in conjunction with the breach: Newport Lending Group, Sage Credit Company, and Home Loan Consultants.

It was believed the passwords were shared so social security numbers, income figures, names, addresses, and phone numbers could be pillaged from LendingTree’s database.

LendingTree leaders indicated at the time that they believed no identity theft or fraudulent activity occurred.

You get the picture. Kodak moment, it’s not.

Last year, the FBI’s Internet Crime Complaint Center reported 11,578 victims of rental or real estate fraud, resulting in a total loss of $350,328,166, according to

“Pretty much all of the big-name mortgage lenders have been accused of ripping off consumers. Companies like Ameriquest, Countrywide, and Money Tree, to name but three that no longer exist,” said Colin Robertson, founder of, on his website. “I knew a guy who worked at Ameriquest and the mortgage points they were charging on loans were ridiculous; usually something around (at least) 6% of the loan amount. (That’s) a huge cost, in my opinion.”

While this may have not have constituted mortgage fraud, or a scam, he added, “it certainly seemed like price gouging and very high-cost lending.”

Robertson added that mortgage fraud is rampant, and while constantly addressed, cannot be stopped.

“Everyone involved in the mortgage industry, from the borrower to the mortgage lender, has probably seen or been a part of a mortgage scam at some point,” he said.

Editor Kimberley Haas contributed to this article.

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Email story ideas to Editor Kimberley Haas: [email protected]