U.S. Bank has agreed to pay a $200 million settlement, to resolve allegations of mortgage lending violations by federal investigators.
The U.S. Department of Justice praised the announcement. Officials call U.S. Bank’s mortgage underwriting practices “lax” and a factor in the foreclosure crisis that hit many parts of the nation in the last decade, including many parts of Ohio.
Steven Dettelbach is the United States Attorney for the Northern District of Ohio. He says the Justice Department will track down lenders that “play fast and loose” with the rules.
“The complaint alleges and the settlement shows, that U.S Bank was basically treating the FHA program like a handout for the banks instead of a hand up for people who deserved a better chance at housing," Dettelbach told ideastream. "The bank’s failure to do very, very basic checking of people’s ability to pay loans and being responsible and putting them into loans they can afford, resulted in taxpayers losing hundreds of millions of dollars.”
As part of the settlement, U.S. Bank also admits that from 2006 to 2011, it repeatedly certified for FHA insurance mortgage loans that failed to meet standards established by the U-S Department of Housing and Urban Development.
A company spokeswoman said in a statement the bank cooperated with authorities and did not admit to wrongdoing.
(Story by ideastream's Brian Bull)