Mortgage

Wells Fargo fails to get government mortgage case dismissed

Court greenlights significant portions of the suit

Wells Fargo (WFC) wanted to rid itself of a toxic-mortgage case filed against the bank by the government, but a federal judge kept the suit alive this week.

U.S. District Judge Jesse Furman denied Wells Fargo’s motion to dismiss a series of statutory claims filed by the U.S. government back in October 2012.

The claims accuse Wells Fargo of misleading the U.S. Department of Housing and Urban Development into believing its loans qualified for insurance from HUD’s Federal Housing Administration. The government seeks damages and civil penalties under the False Claims Act, which could lead to hundreds of millions of dollars in potential losses.

The judge did dismiss the government’s mistake of fact and unjust enrichment claims in their entirely. The court noted that claims filed before 2004 are untimely, while those made after 2004 are barred because HUD was aware of Wells Fargo’s misconduct at the time.

Additionally, Judge Furman in Manhattan noted that the U.S. Department of Justice is allowed to pursue all of its federal statutory claims against Wells Fargo.

The lawsuit between the government and Wells Fargo is one of many filed in the wake of the housing meltdown.

Back in February 2012, Bank of America (BAC) agreed to pay $1 billion to settle False Claims Act mortgage cases involving loans made by Countrywide Financial.

Later that same month, CitiMortgage agreed to pay $158.3 million, and Flagstar Bancorp (FBC) agreed to pay up to $133 million as part of a settlement with the government over mortgages backed by FHA.

In May 2012, Deutsche Bank (DB) settled a lawsuit filed against it by the U.S. government for $202.3 million, accusing a Deutsche subsidiary of failing to meet FHA underwriting guidelines.

Most Popular Articles

Realtors expect these to be the 10 hottest housing markets for the next 3-5 years

Here are the 10 housing markets that the National Association of Realtors expects to the hottest in the nation in the next three to five years.

Dec 11, 2019 By

Latest Articles

Gateway First Bank makes two key hires

Gateway First Bank made back-to-back announcements this week regarding two key hires. The bank welcomed Joell Maddox as director of treasury services and Thomas Ramm joined as chief investment officer.

Dec 12, 2019 By
3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please