NEW YORK — The federal government has sued Wells Fargo Bank in New York, blaming the nation's largest originator of home mortgages for thousands of loan defaults over the past decade.
A civil mortgage fraud lawsuit filed in U.S. District Court in Manhattan on Tuesday seeks to recover hundreds of millions of dollars that the Federal Housing Administration, which insured the loans, had to pay out after borrowers defaulted.
The lawsuit charges San Francisco-based Wells Fargo with falsely certifying that its loans met the standards necessary to be eligible for government insurance. U.S. Attorney Preet Bharara says the bank's plan to reward employees for the number of loans they approved "was an accelerant to a fire already burning."
U.S.: 73,000 homeowners were conned in scheme
Federal investigators have charged 530 people for allegedly defrauding more than 73,000 desperate homeowners around the country who fell behind on mortgage payments, leaving them vulnerable to con artists offering to help them avoid foreclosure.
At a news conference discussing the results of a yearlong probe, Attorney General Eric H. Holder Jr. and Housing and Urban Development Secretary Shaun L.S. Donovan estimated the homeowners lost more than $1 billion in the fraud schemes.
According to court records in the 285 criminal cases brought in the investigation, the struggling homeowners would pay substantial fees with promises that so-called investors would purchase the victims' mortgages. Other homeowners paid hefty fees in exchange for what turned out to be false promises that more favorable mortgage terms would be negotiated on their behalf.
Wal-Mart tests same-day delivery for holidays
NEW YORK — Wal-Mart is testing a same-day delivery service in select markets for customers who buy popular items online during the holiday shopping season.
The move comes as the world's largest retailer faces increasing competition from online giants like Amazon.com., which is testing same-day delivery service in 10 markets. The Bentonville, Ark.-based discounter is trying to cater to Web-savvy shoppers who are demanding more convenience.
Wal-Mart's tests started this month in Northern Virginia and Philadelphia. The program rolled out to Minneapolis on Tuesday.
Stanley Black & Decker selling unit for $1.4B
NEW BRITAIN, Conn. — Tool maker Stanley Black & Decker Inc. is selling its hardware and home-improvement business to Spectrum Brands Holdings Inc. for $1.4 billion in cash.
The hardware and home-improvement unit makes locksets, hardware and faucets for residential use and includes brands such as Pfister, Baldwin and Kwikset.
Spectrum Brands, based in Madison, Wis., said that the acquisition will broaden its product offerings, which include the Rayovac, Remington and Toastmaster brands.
• From wire dispatches and staff reports