Breaking News
FONT-SIZE Plus   Neg
Share SHARE

Wells Fargo Reaches $869 Mln Deal To Settle Freddie Mac Mortgage Loan Claims

RELATED NEWS
Trade WFC now with 

Financial services company Wells Fargo & Co. (WFC: Quote) announced Monday that it has reached a $869 million settlement with Federal Home Loan Mortgage Corp. or Freddie Mac (FMCC) related to mortgage claims. The settlement was reached on Friday.

Wells Fargo will finally settle the claims with a one-time cash payment of about $780 million after adjusting for credits related to certain prior repurchases.

At June 30, 2013, Wells Fargo had fully accrued for the cost of the agreement.

The deal resolves substantially all repurchase liabilities related to mortgage loans sold by Wells Fargo to Freddie Mac prior to January 1, 2009.

The claims stem from the sale of toxic home loans to U.S. government-backed Freddie Mac by making fraudulent misrepresentations and omissions to promote the sale.

The Federal Housing Finance Agency or FHFA, took over Freddie Mac and Fannie Mae (FINA), two government-backed finance companies in 2008, after they were bailed out by the government. FHFA is now the regulator and conservator of Fannie Mae and Freddie Mac and the regulator of the 12 Federal Home Loan Banks.

Wells Fargo, the fourth-largest bank in the U.S. by assets, is the largest originator of home mortgages in the U.S. and under a federal program, has the mandate to originate, underwrite, and certify mortgages for FHA insurance.

The settlement comes within a week of another financial services giant Citigroup, Inc. (C) agreeing to pay $395 million to mortgage guarantor Freddie Mac to settle potential future repurchase claims for faulty mortgages.

The Citigroup settlement covers breaches of representations and warranties on 3.7 million loans sold to Freddie Mac between 2000 and 2012. Citi said the payment will be made out of existing mortgage repurchase reserves. In July, Citi reached a similar settlement with Fannie Mae for $968 million.

WFC closed Monday's regular trading session at $41.32, down $0.27 or 0.65% on a volume of 20.36 million shares.

Register
To receive FREE breaking news email alerts for Wells Fargo & Co and others in your portfolio

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

Business News

Editors Pick
U.K. inflation slowed marginally as expected in August on falls in prices of motor fuels and food, data from the Office for National Statistics revealed Tuesday. Factory-gate prices declined for the second straight month indicating benign inflationary pressures in the pipeline. Consumer prices rose 1.5 percent year-on-year in August, slower than the 1.6 percent rise in July. The United Nations Security Council has long been a bastion for men selected to represent their countries on what is considered to be the Organization's most powerful body. But now, women ambassadors are occupying more than one third of the Council's 15 seats, making history with record representation of the gender. "It's a little strange that it's taken us this long," according to Ambassador Syl Yukiya Amano, Director General of the International Atomic Energy Agency (IAEA), said Monday that nuclear programs of the Democratic People's Republic of Korea (DPRK) and Iran remain matters of serious concern. The head of the United Nations nuclear watchdog made the remarks at the opening of the...
comments powered by Disqus
FREE Newsletters, Analysis & Alerts

 

Stay informed with our FREE daily Newsletters and real-time breaking News Alerts. Sign up to receive the latest information on business news, health, technology, biotech, market analysis, currency trading and more.