Quantcast
Get breaking news alerts via email

Click here to manage your alerts
U.S. Bank settles federal mortgage probe for $200M
First Published Jun 30 2014 01:25 pm • Last Updated Jun 30 2014 04:39 pm

U.S. Bank has agreed to pay $200 million to settle allegations that it failed to check on the creditworthiness of thousands of applicants when it issued government-insured mortgage loans between 2006 and 2011, the local U.S. attorney’s office announced on Monday.

The Minneapolis-based bank, formally U.S. Bank National Association, has cooperated with the Department of Justice and has not admitted any liability, a company spokeswoman said.

Join the Discussion
Post a Comment

U.S. Bank’s lack of due diligence cost taxpayers millions of dollars when it received reimbursement from a Department of Housing and Urban Development insurance fund after loans went bad, said the U.S. attorney for the northern district of Ohio, Steven Dettelbach.

"What motivates the kind of conduct you see in this case is the blind pursuit of profit," Dettelbach said.

A statement of facts included with the settlement agreement said the bank had the authority of HUD to make government-guaranteed mortgage loans without having to directly seek HUD approval. The popular loan program for lower-income borrowers is administered by the Federal Housing Administration, which is part of HUD.

While the bank did not have to seek HUD approval, it did have to follow HUD rules by evaluating borrowers’ credit histories, checking the authenticity of loan documents, verifying borrowers’ income and employment histories and verifying the sources of down payment money. Bank officials also were required to conduct reviews of the loans to determine how well they performed and to report early payment defaults, by borrowers who stopped making payments within six months of when their mortgages were originated.

The statement of facts said U.S. Bank failed to maintain a HUD-required quality control system and included non-FHA loans in its reviews, which understated problems the bank was having with FHA mortgages. It said even when the bank found problems it failed to correct them.




Copyright 2014 The Salt Lake Tribune. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Top Reader Comments Read All Comments Post a Comment
Click here to read all comments   Click here to post a comment


About Reader Comments


Reader comments on sltrib.com are the opinions of the writer, not The Salt Lake Tribune. We will delete comments containing obscenities, personal attacks and inappropriate or offensive remarks. Flagrant or repeat violators will be banned. If you see an objectionable comment, please alert us by clicking the arrow on the upper right side of the comment and selecting "Flag comment as inappropriate". If you've recently registered with Disqus or aren't seeing your comments immediately, you may need to verify your email address. To do so, visit disqus.com/account.
See more about comments here.
Staying Connected
Videos
Jobs
Contests and Promotions
  • Search Obituaries
  • Place an Obituary

  • Search Cars
  • Search Homes
  • Search Jobs
  • Search Marketplace
  • Search Legal Notices

  • Other Services
  • Advertise With Us
  • Subscribe to the Newspaper
  • Access your e-Edition
  • Frequently Asked Questions
  • Contact a newsroom staff member
  • Access the Trib Archives
  • Privacy Policy
  • Missing your paper? Need to place your paper on vacation hold? For this and any other subscription related needs, click here or call 801.204.6100.