Wells Fargo faces ongoing mortgage probes despite recent FHA settlement

Wells Fargo faces ongoing mortgage probes despite recent FHA settlement

Wells Fargo continues to face federal and state mortgage probes, even after the $1.2 billion settlement it reached in early February to resolve claims of misconduct related to mortgages insured by the Federal Housing Administration.

Wells Fargo, in its annual 10-K filing released on Wednesday, said it continues to face “investigations or examinations of certain mortgage related practices” from “federal and state government agencies, including the United States Department of Justice.”

In the bank’s 10-K filing in 2014, it had referred to “government agencies,” instead of the reference to “federal and state government agencies” in the latest filing. A bank spokesman declined to comment on the change.

Wells Fargo said in a filing earlier this month it had reached an agreement in principle to pay $1.2 billion to resolve a 2012 lawsuit brought by the office of Manhattan U.S. Attorney Preet Bharara, an arm of the Justice Department. It said the agreement, which has yet to be finalized, would also resolve claims by the U.S. attorney’s office in San Francisco and the U.S. Department of Housing and Urban Development.

The 2012 lawsuit from Bharara’s office accused Wells Fargo of engaging in “reckless” mortgage origination and underwriting practices from 2001 to 2005. It also said Wells Fargo had failed to report more than 6,000 loans from 2002 to 2010 that did not meet requirements for insurance under the Federal Housing Administration and failed to properly review early payment defaults.

A spokesman for Bharara’s office had no immediate response. A spokeswoman for the office of U.S. Attorney General Loretta Lynch declined comment.

Despite its market-leading position in mortgages, Wells Fargo has paid substantially less in post-crisis mortgage-related government fines than other big banks such as Bank of America Corp and JPMorgan Chase & Co.

Original story.

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