U.S. attorney goes after Wells Fargo for FHA-backed mortgages

A U.S. attorney out of Manhattan slapped Wells Fargo   ($35.10 -0.7%) with a multimillion-dollar lawsuit Tuesday, claiming the bank concealed the condition of Federal Housing Administration-insured toxic loans, costing the government money when the loans eventually defaulted.

Preet Bharara, the U.S. attorney for the Southern District of New York, filed the civil mortgage fraud lawsuit against Wells Fargo this week.
Overall, the suit claims Wells Fargo’s concealment of the true condition of 6,320 loans insured by FHA shielded the bank from having to pay the U.S. Housing and Urban Development Department $190 million to indemnify some of the FHA insurance coverage on the toxic loans.

Read on.

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