US files civil suit against Wells Fargo over mortgage fraud
The United States has filed a civil suit against Wells Fargo, alleging the bank for more than a decade wrongfully certified risky mortgages that ended up costing the government hundreds of millions of dollars.
The suit, filed in a New York federal court Tuesday, charges the bank deemed risky mortgages as high quality and worthy of being guaranteed by the Federal Housing Administration (FHA). When those loans defaulted, the U.S. government was left footing the bill, according to the complaint.
U.S. Attorney Preet Bharara said the bank engaged in a “reckless trifecta of deficient training, deficient underwriting and deficient disclosure, all while relying on the convenient backstop of government insurance.”