U.S. Bank Settles With Justice Department Over Mortgage Loan Allegations

June 30, 2014
Associated Press 
mortgage lending news
U.S. Bank will pay $200 million to settle allegations regarding a lack of due diligence on thousands of applicants who sought government-insured mortgages between 2006 and 2011.

The Minneapolis bank's failure to check the credit-worthiness of loan applicants cost taxpayers millions of dollars when the bank received reimbursements from a HUD insurance fund after loans soured, according to Steven Dettelbach, the U.S. attorney for the northern district of Ohio. U.S. Bank had the authority of HUD to make federally guaranteed mortgages without having to directly seek agency approval, according to a statement of facts included with the settlement. The statement of facts says the bank failed to maintain a HUD-required quality control system, included non-FHA loans in its reviews, and failed to correct problems when it detected them.

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