The U.S. attorney in Manhattan has accused Wells Fargo of defrauding a government-backed mortgage insurance program, in another major civil case brought in the wake of the housing bust and financial crisis.That US attorney is an Obama appointee.
The mortgage-fraud suit, filed by U.S. attorney Preet Bharara, seeks "hundreds of millions of dollars" in damages for claims the U.S. Department of Housing and Urban Development has paid for defaulted loans "wrongfully certified" by Wells Fargo.
The suit alleges the San Francisco banking giant falsely certified loans insured by the government's Federal Housing Administration.
“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," Bharara said in a statement.
Adding "accelerant to a fire," Bharara said, was Wells Fargo's bonus system that rewarded employees based on the number of loans it approved.
The lawsuit alleges the bank failed to properly underwrite more than 100,000 loans it certified to be eligible for FHA insurance. When Wells Fargo discovered problems with the loans, it failed to notify HUD, which administers the FHA program, as required, the suit said. The action alleges more than 10 years of misconduct.
Preetinder Singh "Preet" Bharara (born 1968) an Indian American, is the U.S. Attorney for the Southern District of New York. In 2012, Bharara was named by Time magazine as one of "The 100 Most Influential People in the World," and by India Abroad as its 2011 Person of the Year. Bharara was also featured on a cover of Time Magazine entitled "This Man is Busting Wall Street" for his office's prosecutions of insider trading and other financial fraud on Wall Street. In 2012, Bharara was included in Vanity Fair’s annual “New Establishment” list and Bloomberg Markets Magazine’s “50 Most Influential” list.The sore losers on the right side of the aisle may quite possibly ignore Bharara's past successes on insider trading and call this lawsuit "election season politics", like they already did in their debunked conspiracy theories about the jobs report being cooked. Which is, as former Dubya spokesman Tony Fratto said, a "dumb conspiracy theory."
The Wells Fargo case is the fifth such mortgage-fraud case against a major lender brought by Bharara's office.When you hear or see the false equivalency that Obama and the Bain Capital guy are "the same" or both "puppets of Wall St", just pull a Samuel L Jackson, encourage the other person to "wake the f*ck up", and point stuff like this out. Or simply point out how Romney's top donors are firms like Goldman Sachs, versus Obama's top donors like the U of C.
Three of those cases settled this year: CitiMortgage Inc. for $158.3 million, Flagstar Bank F.S.B. for $132.8 million, and Deutsche Bank and MortgageIT for $202.3million. A lawsuit against Allied Home Mortgage Corp. is pending.
A separate mortgage-fraud task force led by the New York attorney general brought an unrelated lawsuit against JPMorgan Chase & Co. last week.