Skip to main content

Wells Fargo has agreed to pay $2.09 billion in penalty to settle claims related to mortgage loans originated in the run-up to the financial crisis.

The civil fine is for alleged origination and sale of residential mortgage loans that the lender knew contained misstated income information and did not meet the quality that Wells Fargo represented, the U.S. Department of Justice said in a statement on Wednesday.

“Today’s agreement holds Wells Fargo responsible for originating and selling tens of thousands of loans that were packaged into securities and subsequently defaulted,” said Alex Tse, acting U.S. attorney in San Francisco.

Story continues below advertisement

The loans in question included subprime and other relatively risky home loans.

“We are pleased to put behind us these legacy issues regarding claims related to residential mortgage-backed securities activities that occurred more than a decade ago,” Wells Fargo CEO Tim Sloan said.

The settlement amount was fully accrued as of June 30, the bank said.

This is the latest blow to the San Francisco-based bank as it tries to recover from a sales scandal that has hurt its results and tarnished its reputation.

In April, the company paid $1 billion in fines to resolve probes into auto insurance and mortgage lending abuses.

Since the sales scandal surfaced about two years ago, the bank has overhauled management and replaced John Stumpf as CEO. It is also running campaigns to regain trust, including an ad saying Wells Fargo was established in 1852 and “re-established” in 2018.

Report an error
Tickers mentioned in this story
Unchecking box will stop auto data updates
Comments

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • All comments will be reviewed by one or more moderators before being posted to the site. This should only take a few moments.
  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed. Commenters who repeatedly violate community guidelines may be suspended, causing them to temporarily lose their ability to engage with comments.

Read our community guidelines here

Discussion loading ...

Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.
Cannabis pro newsletter