What's that? They don't hold many mortgages? They sell them all upstream? Then why are they foreclosing? But it's a good point that they have such easy access to the secondary market. How about we cut that off, too?
Maybe they are too big to fail overnight. But we can do it in bites. Diminish one piece of their business at a time. Eventually (sooner than you think) they can be trimmed back to a manageable size. But we should start right away. With their track record, each new infraction should result in the death penalty for some piece of their empire.
Then again, we don't need the government to punish them. We just need account holders to close their accounts. If people are not willing to do this, why should the government that represents those people get involved? One reasonable thing that the government could do is require WF to pay the refinance fees for anybody who wants to move their mortgage (or even the servicing of their mortgage) away from WF. Then people can impose a personal penalty on WF without any cost to themselves except the time and effort to go through the process. If we are fed up enough, we could even require WF to buy down the refi to the same interest rate. But that would only benefit recent mortgages who should have known better to begin with.