Bloomberg News reports that Wells Fargo is arguing that the government's lawsuit should be thrown out due to several factors: The case was filed too late (the charges are based on conduct prior to June 2006), the government does not present specific facts to back its case, and the government has released claims against the San Francisco-based bank in last year's National Mortgage Settlement.
‘The complaint tells a nice story, but they fail to connect the dots,’ says William Johnson, a Wells Fargo attorney.
The federal government disputes Wells Fargo's arguments and insists that the lender's actions created significant losses for the FHA's Direct Endorsement Lender Program. Since 2008, the FHA has paid out a total of more than $37 billion in claims related to defaulted mortgages.
‘Wells Fargo knew these loans were no good but submitted the claims,’ says Assistant U.S. Attorney Jeffrey Oestericher. ‘And that is fraud.’