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San Francisco attorneys probing Wells Fargo on mortgage bonds - Bloomberg

Wednesday, 6 Nov 2013 | 2:43 AM ET

Nov 6 (Reuters) - U.S. attorneys in San Francisco have been scrutinizing Wells Fargo & Co's mortgage-bond sales for more than a year, Bloomberg reported, citing two people with knowledge of the matter.

Authorities are investigating whether Wells Fargo violated the Financial Institution Reform and Recovery Act (FIRREA), Bloomberg said. ()

The probe is one of several that seek to hold financial companies liable under FIRREA for shoddy mortgage loans that helped fuel the U.S. housing and financial crises.

FIRREA has become a favorite tool to address alleged mortgage fraud because of its 10-year statute of limitations, twice the length than allowed under other federal securities laws.

Lawyers in the Manhattan U.S. Attorney's Office turned to FIRREA last month to convince a jury that Bank of America engaged in fraud.

Wells Fargo could not immediately be reached for comment by Reuters outside regular business hours.

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