CLEVELAND (AP) — U.S. Bank has agreed to pay $200 million to settle allegations that it failed to check on the creditworthiness of thousands of applicants when it issued government-insured mortgage loans between 2006 and 2011, the local U.S. attorney's office announced on Monday.
The Minneapolis-based bank, formally U.S. Bank National Association, has cooperated with the Department of Justice and has not admitted any liability, a company spokeswoman said.
U.S. Bank's lack of due diligence cost taxpayers millions of dollars when it received reimbursement from a Department of Housing and Urban Development insurance fund after loans went bad, said the U.S. attorney for the northern district of Ohio, Steven Dettelbach.
"What motivates the kind of conduct you see in this case is the blind pursuit of profit," Dettelbach said.
A statement of facts included with the settlement agreement said the bank had the authority of HUD to make government-guaranteed mortgage loans without having to directly seek HUD approval. The popular loan program for lower-income borrowers is administered by the Federal Housing Administration, which is part of HUD.
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