Minneapolis, Minn.-based U.S. Bancorp (NYSE: USB) will pay $200 million in remuneration over claims by the U.S. government that haphazard underwriting had soured certain mortgage loans insured by the Federal Housing Administration ahead of the housing crisis and parallel economic recession.
A statement prepared Monday by the U.S. Department of Justice accused U.S. Bank for being one of many financial institutions that had, in part, contributed to the U.S. housing market bubble and a deleterious wave of foreclosures that had followed. Other major institutions have also been chased by the federal government, and have paid to the tune of $133 million to $1 billion to settle similar claims made by the FHA and other agencies.
“By misusing government programs designed to maintain and expand homeownership, U.S. Bank not only wasted taxpayer funds, but inflicted harm on homeowners and the housing market that lasts to this day,” read the Justice Department’s prepared statement. “As this settlement shows, we will continue to hold accountable financial institutions that violate the law by pursuing their own ¬financial interests at the expense of hardworking Americans.”
U.S. Bank did not admit to any liability, stressing that it has long been respected in the mortgage lending space, with its credentials including “a decades-long, strong working relationship” with federal housing agencies.
Further, a spokesperson from the Justice Department said on Monday that Wells Fargo & Co. (NYSE: WFM), which is the largest lender under the FHA umbrella, is still being chased over similar claims, with litigation presently ongoing at the time of the statement.