Wells Fargo & Co. asked a judge to dismiss a suit by the U.S. government claiming the bank made reckless mortgage loans that caused losses for a federal insurance program, Bloomberg News reported yesterday. The U.S. suit alleges more than a decade of misconduct by Wells Fargo in connection with a Federal Housing Administration program. Wells Fargo argued that the government's suit, which was filed in October, should be dismissed because it fails to adequately allege facts that would allow the case to go forward. The U.S. claims that the FHA paid hundreds of millions of dollars in insurance claims on defaulted mortgages in connection with the FHA’s Direct Endorsement Lender Program as a result of false certifications by Wells Fargo. In the hearing today, Wells Fargo argued that the U.S. released claims against it in a settlement last year. The bank also said that the government's claims for conduct before June 25, 2006, were filed too late and that the U.S. failed to allege specific facts showing that the bank engaged in fraud.
