U.S. prosecutors have filed a civil mortgage suit against Wells Fargo, alleging they falsely certified loans from the Federal Housing Administration, according to a tweet from Jake Beckman, of Bloomberg News.
The U.S. has filed a civil mortgage fraud suit against Wells Fargo, according to a tweet by Bloomberg News. The lawsuit alleges that the bank falsely certified loans from the Federal Housing Administration, Bloomberg TV's Jake Beckman tweets.
The suit comes a little bit more than a week after New York Attorney General Eric Schneiderman sued JPMorgan Chase, alleging the bank kept investors in the dark about the quality of mortgage-backed securities it sold around the period of the financial crisis.
I reported the suit from Attorney General Eric Scheiderman last week, where investor losses have amounted to over $22 billion on investments with a face value of over $80 billion which subsidiary Bear Sterns continued to sell even after knowing of flaws in the assets.
I'll post more details in updates as they become available.
Ben Hallman, reports JPMorgan Chase Lawsuit: New York Attorney General's Suit Is First For Task Force
The New York Attorney General sued JPMorgan Chase on Monday, alleging that Bear Stearns, the troubled investment bank it bought in 2008, "kept investors in the dark" about the quality of the mortgage-backed bonds it was selling as the market started to sour.
The lawsuit is the first legal action against a Wall Street bank to come from a joint federal and state task force announced by President Barack Obama during his State of the Union address in January. It alleges civil fraud violations, which means that potential penalties will be measured in dollars, not jail terms. Nevertheless, the JPMorgan Chase lawsuit qualifies as one of the more significant actions taken by a law enforcement agency to date against a Wall Street bank.
U.S. Attorney for the Southern District of New York Preet Bharara filed a civil lawsuit against Wells Fargo Bank NA WFC -1.93% for millions of dollars in damages for mortgage fraud. "As the complaint alleges, yet another major bank has engaged in a longstanding and reckless trifecta of deficient training, deficient underwriting and deficient disclosure, all while relying on the convenient backstop of government insurance," said Bharara. The lawsuit also alleges that the bank's bonus program which rewarded employees based on the number of loans approved, contributed to the "fire already burning, as quality repeatedly took a back seat to quantity."