Some banks may be too big too fail, but thankfully they are not too big to pay for their mistakes… or at least a portion of them.
In what is being called the largest recovery in FHA history, Wells Fargo has agreed to a $1.2 billion settlement for loan origination violations between 2001 and 2010.
According to a press release from the Department of Justice, Wells Fargo admitted, acknowledged and accepted responsibility for certifying to the Department of Housing and Urban Development that certain residential home mortgage loans were eligible for FHA insurance when, in fact, they were not. When some of those loans defaulted, the government had to pay those FHA insurance claims.
In the resulting claim, the government accused Wells Fargo of misleading HUD into believing it’s loans qualified for FHA insurance and sought damages and civil penalties under the False Claims Act.
According to an article in HousingWire, Wells Fargo attempted to dismiss the claims back in October 2012, but a judge denied it.
HUD Secretary Julián Castro said, “This Administration remains committed to holding lenders accountable for their lending practices. The $1.2 billion settlement with Wells Fargo is the largest recovery for loan origination violations in FHA’s history. Yet, this monetary figure can never truly make up for the countless families that lost homes as a result of poor lending practices.”
How did Wells Fargo get away with at least $1.2 billion infractions?
Get the full transcript at www.NewsForInvestors.com.
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The post #048 – Wells Fargo Settles at $1.2 Billion for Alleged Mortgage Fraud appeared first on Real Wealth Show | Real Estate Investing | Turnkey Rental Property | Cash Flow | Notes | Private Lending | Flipping | Wholesaling.