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Federal Housing Administration

Wells Fargo to pay $1.2 billion over bad government-backed mortgages

Wells Fargo to pay $1.2 billion over bad government-backed mortgages

Wells Fargo & Co. will pay $1.2 billion to settle claims that it duped the federal government into insuring thousands of risky mortgages in the years leading up to the housing crash, the San Francisco banking giant said Wednesday.

If approved by a federal judge, the settlement would close the books on a 2012 lawsuit that the government filed against the bank over bad loans backed by the Federal Housing Administration. It's one of the biggest fines paid by Wells Fargo related to the crash.

Prosecutors alleged that the bank “engaged in a regular practice of reckless origination and underwriting” of FHA loans backed by federal...

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