{"id":22238,"date":"2016-04-08T18:07:51","date_gmt":"2016-04-09T01:07:51","guid":{"rendered":"https:\/\/cjnotebook.com\/?p=22238"},"modified":"2016-04-08T18:07:51","modified_gmt":"2016-04-09T01:07:51","slug":"wells-fargo-bank-agrees-pay-1-2-billion-improper-mortgage-lending-practices","status":"publish","type":"post","link":"https:\/\/cjnotebook.com\/?p=22238","title":{"rendered":"Wells Fargo Bank Agrees to Pay $1.2 Billion for Improper Mortgage Lending Practices"},"content":{"rendered":"

NEW YORK<\/strong><\/span><\/p>\n

\n

Wells Fargo must write a fat check for $1.2 billion for certifying that loans were eligible for FHA mortgage insurance when they were not and admitting that it didn’t disclose thousands of faulty mortgage loans to HUD, according to officials.<\/p>\n

\"DepartmentThe Department of Justice announced Friday that it had settled civil mortgage fraud claims against Wells Fargo and its executive Kurt Lofrano, stemming from Wells Fargo\u2019s participation in the Federal Housing Administration (FHA) Direct Endorsement Lender Program.<\/p>\n

In the settlement, Wells Fargo agreed accept responsibility for, among other things, certifying to the Department of Housing and Urban Development (HUD), during the period from May 2001 through December 2008, that certain residential home mortgage loans were eligible for FHA insurance when in fact they were not, resulting in the government having to pay FHA insurance claims when some of those loans defaulted.<\/p>\n

\u00a0U.S. District Judge Jesse M. Furman approved the settlement Friday.<\/p>\n

\u201cThis settlement is another step in the Department of Justice\u2019s continuing efforts to hold accountable FHA approved lenders that unlawfully submitted false claims at the expense of American homeowners and taxpayers,\u201d said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department\u2019s Civil Division.<\/strong>\u00a0 \u201cIn addition to today\u2019s resolution with Wells Fargo, the department has pursued similar misconduct by numerous other lenders, returning more than $4 billion to the FHA fund and the Treasury and filing suit where appropriate.\u00a0 We remain committed to protecting the public fisc from all who seek to abuse it, whether they do business on Wall Street or Main Street.\u201d<\/p>\n

\u201cThis Administration remains committed to holding lenders accountable for their lending practices,\u201d said Secretary Juli\u00e1n Castro for HUD.\u00a0 \u201cThe $1.2 billion settlement with Wells Fargo is the largest recovery for loan origination violations in FHA\u2019s history.\u00a0 Yet, this monetary figure can never truly make up for the countless families that lost homes as a result of poor lending practices.\u201d<\/p>\n

\u201cToday, Wells Fargo, one of the biggest mortgage lenders in the world, has been held responsible for years of reckless underwriting, while relying on government insurance to deal with the damage,\u201d said U.S. Attorney Preet Bharara for the Southern District of New York.\u00a0<\/strong> \u201cWells Fargo has long taken advantage of the FHA mortgage insurance program, designed to help millions of Americans realize the dream of home ownership, to write thousands and thousands of faulty loans.\u00a0 Driven to maximize profits, Wells Fargo employed shoddy underwriting practices to drive up loan volume, at the expense of loan quality. \u00a0Even though Wells Fargo identified through internal quality assurance reviews thousands of problematic loans, the bank decided not to report them to HUD.\u00a0 As a result, while Wells Fargo enjoyed huge profits from its FHA loan business, the government was left holding the bag when the bad loans went bust.\u00a0 With today\u2019s settlement, Wells Fargo has finally resolved the years-long litigation, adding to the list of large financial institutions against which this office has successfully pursued civil fraud prosecutions.\u201d<\/p>\n

\u201cThis matter is not just a failure by Wells Fargo to comply with federal requirements in FHA\u2019s Direct Endorsement Lender program \u2013 it\u2019s a failure by one of our trusted participants in the FHA program to demonstrate a commitment to integrity and to ordinary Americans who are trying to fulfill their dreams of homeownership,\u201d said Inspector General David A. Montoya for HUD.<\/strong><\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

NEW YORK<\/p>\n

Wells Fargo must write a fat check for $1.2 billion for certifying that loans were eligible for FHA mortgage insurance when they were not and admitting that it didn’t disclose thousands of faulty mortgage loans to HUD, according to officials.<\/p>\n","protected":false},"author":1,"featured_media":21534,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[16,3],"tags":[2471,2472,1710],"class_list":["post-22238","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-home-main-slider","category-u-s-department-of-justice","tag-fha","tag-mortgage-insurance","tag-wells-fargo"],"yoast_head":"\nWells Fargo Bank Agrees to Pay $1.2 Billion for Improper Mortgage Lending Practices<\/title>\n<meta name=\"description\" content=\"NEW YORK Wells Fargo must write a fat check for $1.2 billion for certifying that loans were eligible for FHA mortgage insurance when they were not and 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