Thursday, October 25, 2012

More fraud...Wells Fargo

"United States prosecutors sued Wells Fargo on Tuesday, accusing it of lying about the quality of the mortgages it handled under a federal housing program. It was the latest in a series of lawsuits related to banks’ lending practices during the housing boom.

In a lawsuit filed in Federal District Court in Manhattan, the prosecutors accused Wells Fargo, the country’s largest originator of home loans, of defrauding the government for more than a decade. The bank recklessly issued mortgages and then made false certifications about their condition to the Federal Housing Administration, a government agency that insured them, the complaint said.

The problematic loans were not eligible for the government insurance, according to the lawsuit, and when they soured, the F.H.A. was obligated to cover the losses. The Justice Department is seeking hundreds of millions of dollars in damages."

No comments:

Post a Comment