Wells Fargo in talks to settle FHA mortgage case

by MPA06 Nov 2014
Wells Fargo announced it is in talks to settle a two-year lawsuit that allegedly cost the Federal Housing Administration (FHA) hundreds of millions of dollars. The nation's largest mortgage lender is accused of certifying more than 6,000 FHA-insured mortgages that did not meet origination and underwriting requirements.

The lawsuit was filed in October 2012, by the Department of Housing and Urban Development (HUD). In addition to certifying ineligible loans, the FHA also accused the big bank of failing to properly review early payment defaults.

In June, an appeals court rejected the lender’s motion to dismiss a lawsuit. Wells Fargo says it paid $5 billion in a national mortgage settlement two years ago, and that should be payment enough.

The U.S. government said the ineligible mortgages caused the FHA to pay out hundreds of millions of dollars in claims on loans that did not qualify for insurance, according to Reuters.

 

COMMENTS

  • by Carl H. | 11/6/2014 4:47:55 PM

    Looks like the over paid CEO is a bit dishonest.

  • by Dan G | 11/9/2014 7:55:56 PM

    Wells just won a judgment to sell my daughters home while she was trying to modify her FHA mortgage. Her home is in Illinois where she lives and they did not serve her with a notice to foreclosure. Well they did serve someone at a former address in New Jersey so I guess they thought that was good enough. She got the letter sent to her in Illinois that the modification process would be cancelled because of the sale of her home. It would have been nice if she could have been able to tell her side of the story to the judge.

  • by Candee | 11/10/2014 11:07:44 PM

    you really don't understand the mortgage industry when you say the CEO is dishonest. The rules and regulations change sometimes on a monthly basis and it's very difficult to keep up with some unfortunately the training had a lot to be desired it wasn't dishonesty it was poor training and bad underwriters. I have worked as an underwriter for several of the large banks and Wells Fargo is one of the most honest

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