Wells Fargo Agrees to Pay $1.2B to Settle FHA Claims

wells-fargo-home-bl041312-365.jpg
Pedestrians walk past a Wells Fargo & Co. bank branch in New York, U.S., on Friday, April 13, 2012. Wells Fargo & Co., the largest U.S. home lender, reported a 13 percent rise in first-quarter profit, setting a record as the bank made more money on new mortgages and curbed losses from old ones. Photographer: Scott Eells/Bloomberg

Wells Fargo & Co., the largest U.S. home lender, agreed to pay $1.2 billion to resolve claims related to its Federal Housing Administration mortgage practices.

The agreement includes loans made under the program from 2001 to 2010, the San Francisco-based bank said Wednesday in a filing. Because Wells Fargo had to add to legal costs, the firm lowered its 2015 earnings by $134 million, or 3 cents a share, according to the filing. The firm said in January that it earned $23 billion, or $4.15 a share, last year.

Wells Fargo was one of five banks that agreed in 2012 to the $25 billion nationwide settlement with the Justice Department over mortgage-related claims that included botched foreclosures. The FHA then took additional action against four of the banks, including Wells Fargo, for related housing-crisis wrongdoing. Bank of America Corp., Citigroup Inc. and JPMorgan Chase & Co. decided to settle those matters, while Wells Fargo chose to fight.

Wells Fargo shares were little changed at $48.80 at 8:37 a.m. in early trading in New York. The stock had dropped 8.6% in the past 12 months through Tuesday, outpacing the 12% decline for the 24-company KBW Bank Index.

Bloomberg News
Compliance Field services Enforcement Servicing
MORE FROM NATIONAL MORTGAGE NEWS