Wells Fargo Fails to Win Dismissal of Mortgage Fraud Case

Tuesday, 24 Sep 2013 01:20 PM

 

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A federal judge rejected Wells Fargo & Co.'s bid to dismiss a lawsuit accusing the largest U.S. mortgage lender of defrauding the government by lying about the quality of mortgages it submitted for insurance coverage.

U.S. District Judge Jesse Furman in Manhattan on Tuesday said the U.S. Department of Justice might pursue all its federal statutory claims against Wells Fargo, which is also the fourth-largest U.S. bank.

He dismissed some other claims because either they were brought too late, or the government had supposedly been aware of Wells Fargo's misconduct at the time they arose.

The lawsuit filed last October accused Wells Fargo of misleading the U.S. Department of Housing and Urban Development into believing its loans qualified for insurance by HUD's Federal Housing Administration. It sought damages and civil penalties expected to reach hundreds of millions of dollars.

Wells Fargo did not immediately respond to requests for comment.

© 2014 Thomson/Reuters. All rights reserved.

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