Wells Fargo & Co. was sued by the U.S. government over claims the bank committed fraud by making reckless mortgage loans, Bloomberg News reported yesterday. The government seeks damages and civil penalties under the False Claims Act and the Financial Institutions Reform, Recovery and Enforcement Act of 1989 for alleged misconduct spanning more than a decade related to the San Francisco-based bank's participation in a Federal Housing Administration program, U.S. Attorney Preet Bharara said. The FHA has paid hundreds of millions of dollars in insurance claims on thousands of mortgages that defaulted in connection with the FHA’s Direct Endorsement Lender Program as a result of false certifications by Wells Fargo, according to the complaint. Wells Fargo denies the allegations and "believes it acted in good faith and in compliance" with FHA and Department of Housing and Urban Development rules, the company said.
