According to Bloomberg, Wells Fargo (WFC) is among various firms facing federal scrutiny of mortgage-bond sales under the Financial Institution Reform and Recovery Act, which carries a 10-year statute of limitations and allows the government to sue for fraud affecting a federally insured financial institution.
President Barack Obama set up a task force last year that’s making use of the law, which stems from the savings-and-loan crisis of the 1980s, while examining mortgage-bond underwriting that fueled investor losses and prompted unprecedented government bailouts of banks in 2008. The task force, comprising state and federal agencies, is focusing on about eight banks, a person familiar with the matter said in October.
