NYC Feds Tag Wells In False Claims Suit; Bankster Allegedly "Engaged In Longstanding, Reckless Trifecta Of Deficient Training, Deficient Underwriting & Deficient Disclosure"

From the Office of the U.S. Attorney (New York City):

• Preet Bharara, the United States Attorney for the Southern District of New York, [and others] announced [] that the United States has filed a civil mortgage fraud lawsuit against WELLS FARGO BANK, N.A. (“WELLS FARGO”).
  
  The Government’s Complaint seeks damages and civil penalties under the False Claims Act and the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (“FIRREA”) for more than 10 years of misconduct in connection with WELLS FARGO’s participation in the Federal Housing Administration (“FHA”) Direct Endorsement Lender Program.
  
  The lawsuit alleges that, as a result of WELLS FARGO’s false certifications, FHA has paid hundreds of millions of dollars in insurance claims on thousands of mortgages that defaulted.
  
  Manhattan U.S. Attorney Preet Bharara said:
  
  “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. As also alleged, Wells Fargo’s bonus incentive plan – rewarding employees based on the sheer number of loans approved – was an accelerant to a fire already burning, as quality repeatedly took a back seat to quantity.
  
  What’s more, even after concerns were raised internally at the bank, Wells Fargo began self-reporting bad loans in a significant way, as required, only after this Office issued a subpoena last year. Now a jury will have to weigh the facts to determine the bank’s liability and the scope of the damages it must pay.”

For the U.S. Attorney press release, see Manhattan U.S. Attorney Files Mortgage Fraud Lawsuit Against Wells Fargo Bank, N.A. Seeking Hundreds Of Millions Of Dollars In Damages For Fraudulently Certified Loans (Suit Alleges Longstanding Practice of Reckless Underwriting and Fraudulent Loan Certification for Thousands of FHA-Insured Loans That Ultimately Defaulted).