Posted by: youngragingbull | October 9, 2012

Word on the Street: Wells Fargo sued for mortgage fraud

The U.S. government has launched a lawsuit against financial services giant Wells Fargo over claims that the bank made reckless home mortgage loans for a decade.

In a lawsuit filed Tuesday in Manhattan’s Southern District of New York, the government accused Wells Fargo of “reckless underwriting” and fraudulently approving thousands of home loans that caused large-scale losses for the government.   The Federal Housing Administration paid out millions of dollars in insurance claims on defaulted loans that were falsely certified by Wells Fargo, according to the complaint.

U.S. Attorney Preet Bharara said Wells Fargo’s “intentional concealment” of bad loan information on some 6,320 risky loans caused the federal government to pay out $190 million on claims for defaulted home mortgages. The loans were made between 2002 and 2010.

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