Lawyers for the U.S. and Wells Fargo & Co. told a judge they doubt they can reach a settlement in a government lawsuit accusing the bank of home-mortgage fraud, Bloomberg News reported today. The U.S. sued San Francisco-based Wells Fargo in 2012, claiming that it made reckless mortgage loans that defaulted and cost a federal insurance program hundreds of millions of dollars. The government said that the bank’s misconduct spanned more than a decade while it participated in the Federal Housing Administration’s program. The suit by Manhattan U.S. Attorney Preet Bharara is part of a larger effort to recoup losses from defaulted mortgages insured by the FHA. At a hearing yesterday, attorneys for both sides told U.S. District Judge Jesse Furman that they no longer thought a settlement was within reach. Both sides had halted the pre-trial exchange of evidence for four months to engage in settlement talks, according to a court filing.
