“Wells Fargo is proud of its long involvement in the FHA program, which has helped so many people obtain affordable mortgages and become homeowners,” the bank said.
U.S. Attorney Preet Bharara, who announced the lawsuit along with HUD officials, sought to portray the bank as driven by quantity instead of quality. Bharara said that Wells Fargo rewarded employees based on the number of loans they approved, a practice he called “an accelerant to a fire already burning.”
This marks the fifth lawsuit that the government has brought against major lenders over mortgage practices.
Wells Fargo, based in San Francisco, is the country's fourth-biggest bank by assets and its biggest mortgage lender. Shares fell 70 cents, or 2 percent, to finish at $35.10.