US Bancorp, the nation’s largest regional lender, agreed to pay $200 million (R2 billion) to resolve federal claims that it misrepresented the quality of government-backed mortgages the company originated.
The agreement covered loans that it made from 2006 through 2011 that were backed by the Federal Housing Administration, the Justice Department said yesterday.
“By misusing government programmes designed to maintain and expand homeownership, US Bank not only wasted taxpayer funds, but inflicted harm on homeowners and the housing market that lasts to this day,” Stuart F Delery, the assistant attorney general for the Justice Department’s civil division, said.
The department has been probing shoddy mortgages that helped fuel the financial crisis.
US Bancorp previously disclosed potential claims tied to the probe and “co-operated fully with the department”, the company said yesterday. – Bloomberg