(Reuters) - the United States government filed civil mortgage fraud action on Tuesday to Wells Fargo, volley of bank's latest law, their loans in the real estate market prosperity.
Alleged misconduct related government insurance of the federal housing administration loans 10 years of complaints, in Manhattan federal prosecutor brought about by the, from the Wells Fargo bank (Wells Fargo) seek compensation and civil penalty.
The lawsuit accused of FHA pay millions of dollars in hundreds of thousands of arrears of mortgage insurance claims false evidence, Wells Fargo bank, the fourth largest bank by assets value calculation results.
"Because of the complaint charges, but another major Banks is engaged in a long-term, reckless their training is insufficient, lack of underwriting and defective disclosure, and at the same time, relying on convenient check government insurance, said:" Manhattan federal prosecutors puri characteristic and cheer.
America's largest mortgage loan bank, rich countries, it think it sincerely act, and conform to the FHA and the United States department of housing and urban development rules in a statement denied the charges, saying. The bank said that many of the allegations had already solved HUD, and added that its FHA loan delinquency rate has low to half of the industry average.
On August submitted to the regulatory documents, the bank says it is investigating a possible violation of mortgage practices, including FHA loan related laws and regulations. Wells said, will actively to defend yourself to suit.
Ba LABS office with a similar situation in the past few years, including to solve the cases, February 158300000 dollars in the unit CitiMortgage company, citigroup, Deutsche Bank, Deutsche Bank), which may pay $202300000, solve the circumstances, the.
The United States federal prosecutors office in brooklyn brings the best this case, the bank of American firms Countrywide unit, February agreed to pay $1 billion to resolve charges.
Wells Fargo bank, is a "false ShenBaoFa", for the government fraud of punishment, and in financial institution reform, restore and execution method ", or rarely use of laws and regulations, has become more and more popular, in short, FIRREA in the past year.
Law lower criminal charges burden ratio, than any other financial law has a long limitation and may cause a lot of fines.
In this year of December, a labrador and civil fraud unit, established in March 2010 for the first time FIRREA presented under the litigation.
Compensation and fined
Problems in Tuesday's suit is through a program that allows a bank to launch, underwriting and proof of insurance FHA mortgages, Wells Fargo bank (Wells Fargo) according to the complaints of the loan. In the so-called direct lender approval procedures, whether FHA nor HUD comments loan approval FHA insurance, but the lender should follow the rules of procedure.
In May 2001 to October 2005, according to the complaint, rich countries the authentication of more than 100000 loan, FHA insurance, bank even know the underwriter fail to verify information, directly related to the borrower's repayment ability.
"Extreme poverty population Wells Fargo bank loan quality is a function of the increase in the birthplace of FHA (and bank profits), rather than with the origin of the loan quality management focus," the complaint said.
The bank is not properly training their staff, hire temporary workers, the underwriter paid inappropriate bonus to encourage them to as many loan approval, the complaint says.
Stretch in July 2002 period, at least 42% of the bank's loan no actual FHA eligible for insurance, they submit, even if the illegal act bank internal reference as 5%.
Well from the HUD also retained its bad loans secret, the complaint says. From January 2002 to December 2010 bank internal determined the more than 6000 "major defect" loans, including 3000 default first six months, but not abide by its self report obligation, the complaint says.
To 2005 before October, the bank no self report bad loans, and reports are not sufficient, continue to even in the HUD ask this year, suit state. Told reporters, from 2002 to 2010 bank self-reported only 238 loan, according to complaints.
Some Wells Fargo bank (Wells Fargo) mortgage fraud suspected, but refused to disclose the report HUD include loans, respectively to the Treasury report suspicious activities, according to the action.
Appeal for three times the damages and fines millions of dollars of insurance claim paid to Wells Fargo bank, as well as punishment HUD may be in future payment of claims.
Citigroup, in its settlement, pay $158 million of about $200 million to solve the insurance claim failure, in order to meet the requirements of FHA, a "considerable scale".
Wells Fargo bank complaints also includes the lender of the specific allegations have not reported another $190 million loan, it should be marked as potential problems, HUD, this may increase any final payment from the bank.
The lawsuit increased more and more civil cases, the government has put forward the behavior of the target in the influence of the financial crisis.
The United States department of justice of criminal prosecution charges for some individuals and institutions in the role of the collapsed, and officials say, prosecutors behavior identified as greed, but no crime.




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