The Justice Department said that Wells Fargo & Co. can be sued in a federal lawsuit in New York over mortgage foreclosure practices without violating the terms of a settlement reached with the bank in another case, Bloomberg News reported today. The department, in a filing yesterday in federal court in Washington, D.C., said that the bank's allegation that the U.S. breached the terms of the $5 billion deal by suing in federal court in New York for hundreds of millions of dollars based on conduct that Wells Fargo is no longer liable for is "flatly inconsistent" with the terms of the settlement. The New York case is premised on Wells Fargo, the biggest U.S. home lender, knowing that the origination of loans insured by the Federal Housing Administration did not meet agency requirements, resulting in "substantial losses" to the FHA insurance fund, according to the filing.
