<P> On July 13, 2012, Wells Fargo entered a settlement agreement with the U.S. Department of Justice for allegedly discriminating against African - American and Hispanic borrowers from 2004 to 2009 . Wells Fargo agreed to pay $125 million to subprime borrowers and $50 million in direct down payment assistance in certain areas, for a total of $175 million . Wells Fargo spokespersons denied all claims and are settling only to avoid contested litigation . </P> <P> On August 14, 2012, Wells Fargo agreed to pay around $6.5 million to settle SEC charges that in 2007 it sold risky mortgage - backed securities without fully realizing their dangers . </P> <P> On October 9, 2012, the U.S. federal government sued the bank under the False Claims Act at the federal court in Manhattan, New York . The suit alleges that Wells Fargo defrauded the Federal Housing Administration (FHA) over the past ten years, underwriting over 100,000 FHA backed loans when over half did not qualify for the program . This suit is the third allegation levied against Wells Fargo in 2012 . </P> <P> In October 2012, Wells Fargo was sued by U.S. federal attorney Preet Bharara over questionable mortgage deals . </P>

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