Together We'll Forge (NYSE:WFC)

Shares of Wells Fargo plunged 5% on worries of the foreclosure scandal which is brewing in the United States. The scandal involves foreclosures on houses by the banks without the necessary documentation and the foreclosure of houses using robo-signers which is when workers involved in forclosures indicate the documentation is present when it is not. J.P Morgan the second largest bank in the U.S. already took a charge in their third quarter report relating to the mortgage foreclosure scandal. Despite this charge JPM posted $4.4 billion of profit. Investors are afraid that Wells Fargo will have to report a similar charge. It has been reported Xee Moua a vice president of loan documentation for Wells Fargo, the second-largest US mortgage servicer, had pushed through 500 foreclosures a day.

Bank of America, JP Morgan and GMAC have recently stopped foreclosures after discovering the problem related to these loose foreclosure practices. In a sworn deposition Xee Mou admitted that she did not verify the principal and interest the bank claimed the borrower owed. She only checked whether the name was accurate.

JP Morgan's chief executive, Jamie Dimon said that banks could face penalties relating to this scandal but he added "We don't think there are cases where people have been evicted … where they shouldn't have been."

Wells Fargo shares are down over 5% as we head into the final hour of trading.