Elizabeth Jacobson, Wells Fargo Whistle-Blower, Claims Bank Retaliated By Foreclosing On Her

Elizabeth Jacobson Wells Fargo whistleblowing

Blowing the whistle on your employer will always be a scary proposition for workers.

That can be true even after the whistle-blower leaves the employer. Take the case of loan officer Elizabeth Jacobson, who in 2008 alleged in a lawsuit that Wells Fargo offered bonuses to lenders who targeted blacks in Maryland for subprime mortgages. (Jacobson left the bank in 2007, under "less-than copacetic terms," according to the Baltimore City Paper. Over her career, she was reportedly the bank's top producer of subprime mortgage loans, and even earned a salary of $700,000 in 2004.) The bank never admitted wrongdoing, but in the U.S. District Court in Baltimore did agree to a $175 million settlement for victims and other involved parties this past summer.

And now, according to the Baltimore City News, Jacobson claims Wells Fargo is seeking retribution by trying to take her Maryland home through foreclosure. In a letter to the Federal Housing Finance Agency, she says the bank has returned all seven of the payments that she has paid on a loan for the house, which is located on Maryland's Eastern Shore and has a price tag of $529,000. She's scheduled to face a foreclosure hearing this week. She maintains that the bank violated her "civil rights."

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"I contend they singled me out," she told the Baltimore City Paper. And because of the timing of the incident, she's convinced that the bank went after her residence because of her whistle-blowing. Jacobson says that she was was denied a loan modification five days after "the president of Wells Fargo testified before Congress that he had read my affidavit."

Indeed, during a congressional hearing on June 24, 2010, Wells Fargo Co-President Michael Heid mentioned Jacobson's affidavit from the 2008 lawsuit. Five days after that hearing, Jacobson received word that her application to the Home Affordable Modification program was being denied. Approval under HAMP would have allowed Jacobson to restructure her payment plan.

For its part, Wells Fargo denies singling out Jacobson. In a statement to the City Paper, spokeswoman Vickee Adams said the bank wouldn't comment specifically on the Jacobson case, but did say about bank practices: "We have practiced extremely responsible -- and advocated responsible lending for some time."

Regardless, Jacobson arrived at her 2010 HAMP application with a backlog of financial difficulties. By 2007, Jacobson and her then-husband were busy paying back loans on three houses that they had purchased, including the one in the current dispute. She lost her job that year, and says that she struggles to pay back the loans, which have only gotten worse after the financial crash. And the debt-collection notices soon began piling up, and have included five-figure credit card sums, Jacobson says.

She concedes she's made financial mistakes, saying, "If I would have known [the economy would crash], I would have saved more money."

However Jacobson's case is resolved, it comes at a crucial time. The 2010 Dodd-Frank financial reform legislation has created new protections and financial incentives for whistle-blowers over the past few years.

But 1 in 5 corporate employees who report workplace misconduct will experience some form of workplace retaliation, ranging from harassment to physical violence, according to a report by the Ethical Resource Center, a nonprofit research organization based out of Arlington, Va. And that figure represents an uptick -- the number of retaliation cases reported by workers rose by 2.3 million between 2009 to 2011.




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