Wells Fargo Settles 2006 Lawsuit Related To VA Loans

Wells Fargo press release -------- Wells Fargo & Company (NYSE: WFC) announced today that the company has agreed to settle a lawsuit that claimed some Veterans Administration (VA) Interest Rate Reduction Refinance Loans (IRRRLs) originated by Wells Fargo should not have been eligible for VA guarantees. The suit, which was filed in 2006 and unsealed in 2011, sought compensation to the U.S. government over guarantee claims paid by the VA after those loans defaulted. Under the agreement, Wells Fargo denies the allegations in the lawsuit but will pay $108 million to the U.S. government to resolve the claims. Wells Fargo has previously disclosed this legal action in its public filings, including in its most recent Quarterly Report on Form 10-Q, and the settlement costs have been previously accrued. The lawsuit had claimed that some VA IRRRLs should have been ineligible for VA guarantees because of certain fees charged to the borrowers when the loans were originated. In 2011, Wells Fargo settled a separate class action lawsuit by allowing all veterans who received a VA IRRRL from Wells Fargo between Jan. 20, 2004, and Oct. 7, 2010, to obtain compensation regardless of whether there were indications that the fees in question had been paid by the customer. To learn more click on the picture below to read the release.