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Wells Fargo to pay $1.2 billion in FHA lending settlement

Staff writer |
Wells Fargo & Co will pay $1.2 billion to resolve some civil claims related to its Federal Housing Administration (FHA) lending program, primarily between 2001 and 2010.

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The U.S. Department of Justice sued Wells Fargo in October 2012, saying it failed to report more than 6,000 loans that did not meet requirements for insurance under the FHA, and failed to properly review early payment defaults.

The company, which reported 2015 results on Jan. 15, said it has provided for an additional legal accrual that added $200 million to its noninterest expense last year.

This reduced the company's 2015 net income by $134 million, or 3 cents per common share, to $22.9 billion, or $4.12 per common share, the company said.

The company said it had reached an agreement in principle on Feb. 1 with the Department of Justice, the U.S. Attorney's Office for the Southern District of New York, the U.S. Attorney's Office for the Northern District of California and the U.S. Department of Housing and Urban Development.

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