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US Sues Wells Fargo

October 10 2012

The U.S. government sued Wells Fargo Bank N.A. seeking hundreds of millions of damages for mortgage loans it alleges were fraudulently certified by the bank. The U.S. Attorney’s Office cited numerous allegations, but it indicated in one portion of the allegations that the bank had hired temps to help push through more of the loans that are under contention.

 “Wells Fargo aggravated its widespread underwriting violations by: hiring temporary staff to churn out and approve an ever-increasing quantity of [Federal Housing Administration] loans; failing to provide its inexperienced staff with proper training; paying improper bonuses to its underwriters to incentivize them to approve as many FHA loans as possible; and applying pressure on loan officers and underwriters to originate and approve more and more FHA loans as quickly as possible,” according to the U.S. Attorney’s Office.

For the Bloomberg story on this case, click here.

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