From Bloomberg Businessweek on Tuesday:
“The U.S. government is going after a further alleged scoundrel from the housing bust. The victim, as in earlier cases, is the Federal Housing Administration (FHA), which paid out millions in claims on loans that never should have been issued. What may surprise people is the alleged villain: Wells Fargo (WFC), the bank that counts Warren Buffet as its largest shareholder.
In a civil mortgage fraud lawsuit, filed on Oct. 9 in U.S. District Court in New York, Wells Fargo is accused of fraudulently approving government-backed mortgages, then turning around to collect government insurance when the dubious loans defaulted.
At first glance, one might assume this is just another symptom of the headache the bank inherited with Wachovia, the failing rival it acquired for $15.1 billion four years ago. But as my Bloomberg News colleagues Chris Dolmetsch and Dakin Campbell note, any culture at fault here would stem from Wells Fargo. The complaint points to “a longstanding and reckless trifecta of deficient training, deficient underwriting, and deficient disclosure, all while relying on the convenient backstop of government insurance,” U.S. Attorney Preet Bharara said in a statement.”
Read more here...
“The U.S. government is going after a further alleged scoundrel from the housing bust. The victim, as in earlier cases, is the Federal Housing Administration (FHA), which paid out millions in claims on loans that never should have been issued. What may surprise people is the alleged villain: Wells Fargo (WFC), the bank that counts Warren Buffet as its largest shareholder.
In a civil mortgage fraud lawsuit, filed on Oct. 9 in U.S. District Court in New York, Wells Fargo is accused of fraudulently approving government-backed mortgages, then turning around to collect government insurance when the dubious loans defaulted.
At first glance, one might assume this is just another symptom of the headache the bank inherited with Wachovia, the failing rival it acquired for $15.1 billion four years ago. But as my Bloomberg News colleagues Chris Dolmetsch and Dakin Campbell note, any culture at fault here would stem from Wells Fargo. The complaint points to “a longstanding and reckless trifecta of deficient training, deficient underwriting, and deficient disclosure, all while relying on the convenient backstop of government insurance,” U.S. Attorney Preet Bharara said in a statement.”
Read more here...
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