Wells Fargo Faces Ongoing Mortgage Probes Despite Recent FHA Settlement

Reuters |  February 24, 2016   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.  Read more here

Quicken Loans Worker Charged with Bank Fraud by Justice Department

Quicken Loans purposely induced prospective homeowners into entering into loans they should have never qualified for because they knew the Federal Government would secure those loans if they went bad.  Since they had nothing to worry about by making these loans they simply committed fraud and hurt not only the government but those people pursuing the American dream only to find out they would be foreclosed on in short order.  The Federal Government is not happy about having to pay these insurance claims for loans that should have never been made and has instituted a lawsuit against Quicken.  This is a classic example of how lax underwriting standards and an every growing demand for mortgage paper led to rampant abuse that hurt the government and the average citizen.  Call Jackson & Elrod, LLP today to find out if you are the victim of a predatory loan or fraud by your lender.

Chad D. Elrod, Esq.