Wells Fargo last week agreed to pay a $2.1 billion fine to the government to settle allegations that it misrepresented the types of mortgages it sold to investors during the housing bubble.
The Department of Justice has accused Wells Fargo of “understating the risk and quality” of least 73,500 subprime mortgage loans sold to investors between 2005 and 2007. Half of these loans defaulted in the years that followed, resulting in billions of dollars of investor losses.
“This settlement holds Wells Fargo accountable for actions that contributed to the financial crisis,” said Acting Associate Attorney General Jesse Panuccio, in a statement.
Wells Fargo said in a statement it was “pleased to put behind us these legacy issues” and said it had previously set aside the money to cover the settlement.
Wells Fargo is one of the last big banks to settle charges related to its role in the housing bubble. Bank of America paid a $5 billion fine in 2014 for similar charges, and Citigroup paid a $4 billion fine.Read More