U.S. Bancorp will pay $200 million to resolve claims brought by the Federal Housing Administration (FHA) that it misrepresented the quality of mortgages it sold onto the secondary market from 2006 through 2011, which, in turn, resulted in significant losses for the FHA when borrowers defaulted.
‘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,’ says Stuart F. Delery, assistant attorney general for the Justice Department's civil division, in a statement. ‘As this settlement shows, we will continue to hold accountable financial institutions that violate the law by pursuing their own financial interests at the expense of hardworking Americans.’
‘U.S. Bank ignored certain lending requirements causing substantial losses to taxpayers,’ says Steven M. Dettelbach, U.S. attorney for the northern district of Ohio. ‘This settlement demonstrates that the Department of Justice will not permit lenders to play fast and loose with the rules and stick the American people with their significant tab.’
‘U.S. Bank's lax mortgage underwriting practices contributed to home foreclosures across the country,’ adds Barbara L. McQuade, U.S. attorney for the eastern district of Michigan. ‘This settlement recovers funds for taxpayers and demonstrates that lenders will be held accountable for engaging in irresponsible lending practices.’
The agreement does not indemnify U.S. Bank from additional state and federal enforcement actions regarding the quality of its loan underwriting, or for any servicing or foreclosure conduct, including civil enforcement actions against the bank for violations of the Consumer Financial Protection Bureau's new mortgage servicing rules.
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