U.S. Bancorp (USB:US), the nation’s largest regional lender, said authorities are investigating origination and servicing practices for home loans insured by the Federal Housing Administration.
Agencies are also probing compliance with sales guidelines on home loans bought by government-sponsored enterprises “and various practices related to lender-placed insurance,” the Minneapolis-based company said today in its quarterly regulatory filing (USB:US). The FHA probe includes the Department of Housing and Urban Development’s inspector general and the Justice Department, according to the filing.
“The company is cooperating fully with these examinations and investigations, any of which could lead to administrative or legal proceedings or settlements,” the bank said. The outcome could include fines, penalties, restitution or more expensive business practices, according to the filing.
Regulators are probing allegations of faulty underwriting and bias on home and auto loans at some of the biggest regional U.S. lenders. Regions Financial Corp. said in November it was subpoenaed by HUD over the origination of mortgages backed by the FHA. Regions, based in Birmingham, Alabama, has said it’s cooperating.
Nicole Garrison-Sprenger, a spokeswoman for U.S. Bancorp, and Marta Metelko, a spokeswoman for HUD’s inspector general, declined to comment.
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