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Wells Fargo challenges mortgage case

Nov. 5, 2012 at 2:22 PM   |   Comments

NEW YORK, Nov. 5 (UPI) -- U.S. bank Wells Fargo said it should be exempt from a federal case involving mortgage fraud due to its participation in a foreclosure case settlement.

Five banks, including Wells Fargo, agreed to a $25 billion payment to settle charges of depriving home owners of due process in their hiring of law firms termed "foreclosure mills," when trying to rush through the huge number of foreclosures that resulted from the financial crisis of 2008 and the concurrent economic downturn.

Wells Fargo now says that settlement includes an agreement that the federal government not pursue charges on mortgage fraud unless it could prove the bank's agents knowingly certified mortgages that did not meet Federal Housing Administration standards, The Washington Post reported.

In papers filed in court in Manhattan, Wells Fargo said the wording on the settlement was "clear and unambiguous."

The bank is asking for compensation for the charges it considers repetitive and improper.

But the U.S. attorney accused Wells Fargo of certifying at least 6,300 mortgages it knew did not meet federal standards.

Prosecutors said the bank rewarded staff for the number of mortgages written, not for the quality of the loans.

© 2012 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
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