By Maria Armental
BB&T Corp. said it received two subpoenas from the Justice
Department in November and December seeking additional information
related to a federal audit of its government-backed loan
business.
Chief Executive Kelly King had said the company was notified
late in the second quarter that the U.S. Department of Housing and
Urban Development was auditing BB&T's FHA-insured loan
origination process.
The Winston-Salem, N.C.-based bank, one of the largest lenders
in the southeastern U.S., identified a "potential exposure" related
to defaulted loan losses incurred by the Federal Housing
Administration of $25 million to $105 million and set aside $85
million in the second quarter.
In June, the Justice Department hit U.S. Bancorp with a $200
million civil penalty, saying it repeatedly submitted loans it
originated to a FHA insurance program that failed to meet
underwriting standards established by HUD.
Write to Maria Armental at maria.armental@wsj.com
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