I recently got a chance to spend some time with my husband for a well deserved movie night. We decided to watch The Big Short starring, Christian Bale and Ryan Gosling. It is about the mortgage crisis that took place in the early part of the century.
At the end of the movie it highlighted the fact that as we all know the banks were bailed out and only one person went to jail. I found this article on the settlement that Wells Fargo had to pay and it definitely helped me sleep a bit easier at night knowing that there was at least a little justice served.
Wells Fargo will pay $1.2 billion to the federal government in what will mark a record-setting recovery settlement for the Federal Housing Administration.
The settlement will go to resolving claims of loan origination violations that occurred in the mortgage giant’s FHA mortgage insurance lending program from 2001 to 2010. During that period, Wells Fargo acknowledged to the government that certain residential home mortgage loans they approved as eligible for the FHA insurance were not. The government, therefore, had to step in and pay the FHA insurance claims whenever a borrower defaulted on those loans.
“This Administration remains committed to holding lenders accountable for their lending practices,” Secretary Julián Castro for HUD said in a statement. “The $1.2 billion settlement with Wells Fargo is the largest recovery for loan origination violations in FHA’s history. Yet, this monetary figure can never truly make up for the countless families that lost homes as a result of poor lending practices.”
Wells Fargo officials say the settlement allows the lender to put the legal process surrounding these questionable loans dating back from 2001 behind them and finally move on.
“We are dedicated to providing access to credit to a broad range of customers through offerings that exist today as well as new products and programs on the horizon,” Franklin Codel, president of Wells Fargo Home Lending, said in a statement. “Wells Fargo has helped millions of people buy homes and we will continue to meet the financing needs of the customers and communities the FHA program is intended to serve.”
Source: “It’s Official: Wells Fargo Reaches Largest Settlement in FHA History,” HousingWire (April 8, 2016)