Wells Fargo & Co. (WFC) was sued by the U.S. for hundreds of millions of dollars in damages over claims the bank made reckless mortgage loans that defaulted and caused losses for a federal insurance program.
The U.S. government sued Wells Fargo & Co. alleging fraud over reckless mortgage loans. Photographer: Scott Eells/Bloomberg
The government seeks damages and civil penalties under the False Claims Act and the Financial Institutions Reform, Recovery and Enforcement Act of 1989 for alleged misconduct spanning more than a decade related to the bank’s participation in a Federal Housing Administration program, U.S. Attorney Preet Bharara in Manhattan said in a statement. The complaint was filed today in New York federal court.
“As the complaint alleges, yet another major bank has engaged in a longstanding and reckless trifecta of deficient training, deficient underwriting and deficient disclosure, all while relying on the convenient backstop of government insurance,” Bharara said in the statement.