Wells Fargo is the latest collateral damage from the housing boom. U.S. prosecutors are suing the bank—the country’s largest originator of home loans—for defrauding the government, accusing it of issuing mortgages without proper discern and then lying about their condition to the Federal Housing Authority. When these problematic loans later defaulted, the FHA was obligated to cover the hundreds of millions of dollars in losses. The lawsuit attempts to reclaim those damages. “The bank will present facts to vigorously defend itself against this action,” a Wells Fargo rep said in a statement.
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