Court Denies Motion to Dismiss in Fraud Case Against Wells Fargo and Mortgage Investors Corporation

Last month, United States District Judge Amy Totenberg denied in part a motion to dismiss in a whistleblower lawsuit that was originally filed against eight banks: Countrywide Home Loans, Inc., PNC Bank, First Tennessee Bank, SunTrust Mortgage, CitiMortgage, JP Morgan Chase, Wells Fargo Bank, and Mortgage Investors Corporation (MIC).

Prior to Judge Totenberg’s decision, six of the Defendants in the case agreed to settle the claims brought against them for a total of $161.7 million.  The remaining Defendants, Wells Fargo and MIC will now need to continue to litigate the case.

According to the complaint, the banks made false certifications to the Veterans Administration in order to receive loan guarantees from the Government.  The banks then allegedly charged military veterans hidden fees on their refinanced home loans and when the loans went into default, the banks tried to collect on the fraudulently procured government loan guarantees.  The lawsuit was filed under seal in 2006 by whistleblowers Victor Bibby and Brian Donnelly.  In 2011 the Government decided not to intervene and the case was unsealed.

To stay updated on the progress of the litigation, keep checking our website or contact us at


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