Wells Fargo pays $591m to resolve Fannie problems

Money On Hook

Wells Fargo has agreed to pay Fannie Mae $591m to resolve repurchase demands on loans originated before 2009 and sold to the government-backed firm.

Bloomberg reports that Wells Fargo paid $541m in cash to Fannie Mae after adjusting for prior repurchases, the lender said in a statement. The firm had set aside funds to cover the full cost as of September 30th, according to the statement.

Banks from Wells Fargo to Bank of America have agreed to pay Fannie Mae and its smaller competitor, Freddie Mac, for losses on soured mortgages as they seek to cap costs on loans originated before the housing crash. Wells Fargo reached a $869m accord with Freddie Mac in September to resolve disputes on a similar subset of loans.

Wells Fargo will continue to face other obligations tied to the loans and while it will be released from repurchase liabilities, there are some exceptions, according to a separate statement from Washington-based Fannie Mae.

The settlement concludes Fannie Mae’s review of 'legacy' loans sold to it by mortgage lenders, the firm said.

To access the complete Bloomberg article hit the link below:

Wells Fargo to pay Fannie Mae $591 Million to Resolve Claims

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