Wells Fargo says it's not liable for new charges
When the U.S. Attorney in Manhattan charged Wells Fargo with fraud earlier this month for failing to properly underwrite more than 100,000 mortgages in an effort to make them appear eligible for FHA insurance, it was noted that the charges seemed somewhat derivative.
Wells Fargo made clear its view that some of issues had previously been addressed with HUD, and the bank now hopes the derivative nature of the suit will get the charges nixed. It has approached a judge in New York, arguing that its settlement with federal officials and state AGs--the much ballyhooed $25 billion settlement that some touted as a definitive deal to end the mortgage mess--means that it is no longer liable for charges related to the same misconduct.
Wells Fargo's filing was submitted to U.S. District Judge Rosemary Collyer, who was the judge who approved the $25 billion agreement back in April between five banks and U.S. and state probes, according to Bloomberg,
The article also notes that the U.S. is seeking to recover unspecified damages and civil penalties under the False Claims Act for hundreds of millions in claims already paid by HUD as well as penalties under the 1989 Financial Institutions Reform, Recovery and Enforcement Act. Preet Bharara, the U.S. Attorney in Manhattan, has already sued other banks similarly, including Deutsche Bank and Citigroup.
It's unclear to legal laymen whether these new charges against Wells Fargo violate the terms of the previous settlement. We'll know soon enough.
- here's the article
Wells Fargo charged with mortgage fraud