California Real Estate Fraud Report

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05
Feb

Wells Fargo reaches $1.2 billion settlement in fraud mortgage case

Wells Fargo and Company (WFC),  has agreed to pay $1.2 billion to resolve civil claims filed against it by the federal government relating to its Federal Housing Administration (FHA) lending program during the period from 2001-2010. Federal regulators brought a civil fraud lawsuit against Wells Fargo in 2012, accusing it of engaging in “reckless” underwriting that resulted in thousands of government-backed loans defaulting and hundreds of millions of dollars in insurance payments.

The FHA program gives lenders authority to certify that mortgages they underwrite meet requirements for federal insurance but if any of those federally-backed mortgage defaults, the US Department of Housing and Urban Development (HUD) must make insurance payouts to the holder of the loan. In other words, taxpayers are on the hook, not the banks, for the bad lending practices of banks.

The agencies with which Wells Fargo has reached agreement are the United States Department of Justice, the United States Attorney’s Office for the Southern District of New York, the United States Attorney’s Office for the Northern District of California, and the United States Department of Housing and Urban Development.

Read the original article in Big News Network.

 

© Copyright 2007-2017 Monique Bryher

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The information and notices contained on The California Real Estate Fraud Report are intended to summarize recent developments in real estate fraud, mortgage fraud, short sale fraud, REO fraud, appraisal fraud, loan modification scams, loan modification fraud and other real estate related crimes occurring in Los Angeles and California. The posts on this site are presented as general research and information and are expressly not intended, and should not be regarded, as legal advice. Much of the information on this site concerns allegations made in civil lawsuits and in criminal indictments. All persons are presumed innocent until convicted of a crime. Readers who have particular questions about real estate fraud, mortgage fraud and appraisal fraud matters or who believe they require legal counsel should seek the advice of an attorney.

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