U.S. Bancorp to Pay $200 Million to End Probe of FHA Loans

U.S. Bancorp agreed to pay $200 million to resolve federal claims that it misrepresented the quality of government-backed mortgages the company originated.

The agreement covers loans that Minneapolis-based U.S. Bancorp made from 2006 through 2011 that were backed by the Federal Housing Administration, the Justice Department said today in a statement.

“By misusing government programs designed to maintain and expand homeownership, U.S. Bank not only wasted taxpayer funds, but inflicted harm on homeowners and the housing market that lasts to this day,” Stuart F. Delery, assistant attorney general for the Justice Department’s civil division, said in the statement.

The Justice Department has been probing shoddy mortgages that helped fuel the financial crisis and caused losses for government agencies that backed the loans. SunTrust Banks Inc. agreed this month to pay $968 million to resolve federal and state probes that a unit misrepresented the quality of mortgages the bank originated and deceived homeowners on loans it serviced.

U.S. Bancorp previously disclosed potential claims tied to the probe and “cooperated fully with the DOJ,” the company said today in a separate statement.

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Comments (1)
Look and see what the title of this article is actually saying. Are you not amazed. A Bank is paying off a regulator to stop an audit. If the Bank is paying $200 million, can we not assume that the bank feels the audit would expose at least this amount, of fines, if not more? Or is it possible the bank is worried about some other findings that may be exposed if the audit continues? Or maybe with a $200 million payment the bank still has some return on investment. Regardless, what kind of game are they playing here. If there are issues should not they all be exposed? By allowing a payoff to happen are all those that were involved in this huge fraud against the FHA being exposed and dealt with? Or is the goal of our Government being accomplished, the transfer of $200 million from the bank to the Government? If the answer to the last question is yes, then we have another problem. The $200 million is not really coming from the bank, is it? Who is really paying the fine and then who is really being punished?
Posted by ROBERT R | Wednesday, July 02 2014 at 3:34PM ET
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