HUD Audit Raps Wells Fargo

A Department of Housing and Urban Development audit of Wells Fargo Home Mortgage has found that the largest originator of Federal Housing Administration loans improperly submitted 2,325 loans for late endorsement.The Des Moines, Iowa-based lender submitted the FHA loans more than 60 days after closing, and the borrowers were delinquent on their payments, according to the HUD Inspector General audit report. Wells Fargo originated 224,930 FHA loans in 2001 and 2002, and 53,550 of the loans were submitted late. The IG auditors also reviewed 74 defaulted loans and found 61 had underwriting deficiencies. The IG is recommending that HUD require indemnification for any losses on the 2,235 loans. In response, Wells Fargo agreed to indemnify HUD for most of the 2,235 loans and 49 of the defaulted loans. "Because of our commitment to leadership in FHA lending, WFHL has taken steps to improve its origination and underwriting processes and controls," executive vice president Cara Heiden said.