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Is Wells Fargo Another Bad Actor in the Housing Crisis?

Is Wells Fargo Another Bad Actor in the Housing Crisis?
Photograph by Ryan Anson/Bloomberg News

The U.S. government is going after a further alleged scoundrel from the housing bust. The victim, as in earlier cases, is the Federal Housing Administration (FHA), which paid out millions in claims on loans that never should have been issued. What may surprise people is the alleged villain: Wells Fargo, the bank that counts Warren Buffet as its largest shareholder.

In a civil mortgage fraud lawsuit, filed on Oct. 9 in U.S. District Court in New York, Wells Fargo is accused of fraudulently approving government-backed mortgages, then turning around to collect government insurance when the dubious loans defaulted.