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Wells Fargo to pay $2.09 billion fine over decade-old mortgage loans

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Wells Fargo
Banking   The loans in question included relatively risky home loans

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.

"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.

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.

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