Government sues Wells Fargo for reckless lending practices

The Washington Post (10/10, Douglas, Dennis, 552K) reports, "In a civil lawsuit filed in Manhattan federal court, government lawyers accused the San Francisco-based bank of concealing the true nature of at least 6,320 shoddy mortgages that were insured by the Federal Housing Administration. The government is seeking unspecified civil penalties that could reach into the hundreds of millions of dollars." The Post adds, "Wells Fargo adamantly denied the allegations, saying in a statement that 'it acted in good faith and in compliance' with FHA and Department of Housing and Urban Development rules." The bank also said it had addressed many of the allegations in the suit with HUD. The piece quotes HUD General Counsel Helen Kanovsky as stating, "There was a time when Wells Fargo placed profits over people, corporate results over corporate integrity, and did not consider the effect its actions would have on the FHA program as well as the overall economy."