Wells Fargo: Feds Seek Penalties Over ‘Fair Lending’ Violations

Wells Fargo, the nation’s top mortgage lender, said Justice Department prosecutors are seeking “monetary damages and civil penalties” over possible violations of fair lending, or anti-discrimination, laws.
The bank said in a regulatory filing that government agencies continue investigations or examinations of mortgage-related practices.
“The investigations relate to two main topics: (1) whether Wells Fargo may have violated fair lending or other laws and regulations relating to mortgage origination practices; and (2) whether Wells Fargo properly disclosed in offering documents for its residential mortgage-backed securities the facts and risks associated with those securities,” Wells Fargo said.
The lender also said the Department of Justice has advised that it “believes it can bring claims against Wells Fargo for monetary damages and civil penalties under fair lending laws.”
Wells Fargo has dealt with government investigations into lending practices and foreclosures since the housing crisis of 2007-2008. During the housing bubble buildup, the San Francisco-based bank vastly expanded its share of the U.S. mortgage market.
The firm was in talks with Justice officials last year to resolve an investigation into whether it directed African-Americans to subprime loans, a person familiar with the matter told Bloomberg in July.  Wells Fargo also faces a U.S. prove of whether it neglected bank-owned homes in minority neighborhoods, Bloomberg has also reported.
“We believe such claims should not be brought and continue seeking to demonstrate to the Department of Justice our compliance with fair lending laws,” Wells Fargo said in yesterday’s regulatory filing.
Wells Fargo is also one of the top five lenders under consent agreements in the $25 billion mortgage settlement to resolve charges of “robo-signing,” or the improper or false documentation of foreclosures.
The mortgage servicers will be required to implement new policies and standards to prevent foreclosure abuses of the past, and compensate homeowners identified as “robo-signing” victims by federal and state authorities.

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