Wells Fargo is being sued by United States prosecutors for giving false reports about the number of mortgages it handled while under the assistance of a federal housing program.
Filed in the Federal District Court in Manhattan, the lawsuit charged the bank, which is the country's largest provider of home loans, for lying to the government for more than a decade, according to the New York Times.
Prosecutors also accused the bank for carelessly issuing mortgages and then lying to the Federal Housing Administration about the conditions they were in. The F.H.A. took the bank under its wing and covered it losses.
Now, the Justice Department is seeking hundreds of millions of dollars in damages.
"Yet another major bank has engaged in a longstanding and reckless trifecta od deficient training, deficient underwriting and deficient disclosure, all while relying on the convenient backstop of government insurance," Preet S. Bharara, the United States attorney in Manhattan, said in a statement according to the Times.
Bharara's office filled the lawsuit.
The bank denied all the accusations, stating that it acted in good faith while receiving assistance from the government program.
According to the Times, the bank said in a statement, "Wells Fargo is the leading F.H.A. lender and has acted as a prudent and responsible lender, with F.H.A. delinquency rates that have been as low as half the industry average."
"The bank will present facts to vigorously defend itself against this action."
This lawsuit comes after many lawsuits have been filed against other big boys in the game like Bank of America, Deutsche Bank, and JP Morgan Chase for their lending practices during the housing crisis.
