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Wells Fargo fights new US suit, points to earlier pact

Nov 02 2012 Aruna Viswanatha, Reuters

Wells Fargo has gone to court to challenge a financial-crisis lawsuit recently brought against it by the Justice Department, saying a prior multi-bank $25 billion mortgage settlement already cleared it of some liability. The fourth-largest U.S. bank asked a federal judge in Washington on Thursday to rule that the U.S. violated the terms of the earlier settlement by filing its recent case in New York. The U.S. Attorney's office in Manhattan sued Wells Fargo on Oct. 9 seeking damages and penalties for more than 10 years of alleged misconduct related to government-insured Federal Housing Administration loans. But an earlier consent judgment already "wiped the slate clean" for the bank in terms of certain conduct related to its FHA portfolio, Wells Fargo said in its Thursday court filing. In February, Wells Fargo and four other top banks agreed to $25 billion in penalties and relief to homeowners to resolve allegations about shoddy mortgage servicing practices.

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