Wells Fargo will pay $24 million to settle 'pick-a-payment' allegations

wells fargo sign
wells fargo sign

Wells Fargo Bank has agreed to pay $23.7 million to eight states and modify consumers' mortgages to settle deceptive marketing allegations over risky "pick-a-payment" home loans.

The home loans were sold by Wachovia Corp. and Golden West Corp., which did business as World Savings Bank. But Wells Fargo bought out those companies in 2008 and became responsible for the loans. Under the settlement announced today, Wells Fargo admits no liability or wrongdoing.

The money going to the states will be used for restitution for consumers who have lost their homes because of the pick-a-payment mortgages, informing consumers and creating state programs to fight mortgage and loan fraud.