The U.S. Attorney’s office in California said Wednesday it is fining Wells Fargo more than $2 billion for mortgages it made and sold in the run-up to the financial crisis, the latest blow to the San Francisco-based bank.
Wells has agreed to pay the $2.09 billion penalty for allegedly misrepresenting the quality of the residential loans, which cost investors billions of dollars when they soured, the U.S. Attorney’s office for the Northern District of California said. The bank, which has a large presence in Charlotte, knew the loans were not of the quality that Wells represented, according to the allegations.
“Abuses in the mortgage-backed securities industry led to a financial crisis that devastated millions of Americans,” acting U.S. Attorney Alex Tse said in a statement. “Today’s agreement holds Wells Fargo responsible for originating and selling tens of thousands of loans that were packaged into securities and subsequently defaulted.”
Source: The Herald