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Wells Fargo challenges lawsuit by US government

Wells Fargo [corporate website] claimed Thursday that a federal lawsuit [complaint, PDF] filed by the US government to recover money from defective mortgages is barred by a settlement reached earlier this year. The government filed the lawsuit last month, alleging that Wells Fargo deliberately concealed the nature of mortgages that were insured by the federal government, ultimately costing the government hundreds of millions of dollars in insurance claims. Wells Fargo alleges that the government's lawsuit was a violation of a $25 billion settlement agreement [official website; JURIST report] reached earlier this year to address mortgage loan servicing and foreclosure abuses. In its response to the complaint, the bank alleged that the government was trying impose additional liability [Bloomberg report] on Wells Fargo for conduct that they already settled in March.

Wells Fargo [JURIST news archive] has been involved in many legal battles recently. In August the company was assessed a $6.5 million fine [JURIST report] by the Securities and Exchange Commission (SEC) for improperly selling high-risk mortgage securities to investors during the housing market crash in 200. In July the US Court of Appeals for the Ninth Circuit dismissed a lawsuit against several banks, including Wells Fargo, that accused the banks of price-fixing [JURIST report]. In March the SEC filed a subpoena enforcement action [JURIST report] against Wells Fargo to force the company to hand over documents connected to the company's sale of nearly $60 billion in residential mortgage-backed securities to investors.

About Paper Chase

Paper Chase is JURIST's real-time legal news service, powered by a team of 30 law student reporters and editors led by law professor Bernard Hibbitts at the University of Pittsburgh School of Law. As an educational service, Paper Chase is dedicated to presenting important legal news and materials rapidly, objectively and intelligibly in an accessible format.

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