US Sues Wells Fargo Over FHA-Insured Loan Defaults
The federal government has filed suit against Wells Fargo, alleging that the lender misrepresented the quality of thousands of loans in order to be eligible for federal loan insurance. The lawsuit seeks to recover "hundreds of millions of dollars" that the Federal Housing Administration paid out after borrowers defaulted on Wells Fargo mortgage loans. The lawsuit alleges that between May 2001 and October 2005, Wells Fargo certified that over 100,000 mortgage loans were eligible for the insurance. But "a very substantial percentage of those loans — nearly half in certain months" were not eligible, according to the lawsuit.
From "US Sues Wells Fargo Over FHA-Insured Loan Defaults"
Associated Press (10/09/12)
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