Wells Fargo Settles Fannie Mae Claims With $591 Million Deal
In a deal which was announced Monday, Wells Fargo (NYSE:WFC), the largest mortgage lender in the U.S., will pay Fannie Mae $591 million in order to settle claims that it sold defective mortgages during the financial crisis of 2008. After adjustments are made for prior repurchases, Wells Fargo will shell out $541 million in cash set aside for payment to the government-controlled mortgage buyer.
The deal will cover loans originated from Wells Fargo throughout 2008 which Fannie Mae has been attempting to get the bank to buy back; the deal will resolve all of the repurchasing issues related to the loans in question. In October, the bank also agreed to pay Fannie Mae’s sister firm, Freddie Mac $869 million to resolve similar claims regarding pre-2009 mortgages, according to the Los Angeles Times.
Chief Executive at Fannie Mae, Timothy Mayopoulous concurred that this will be the last payment from Wells Fargo, “We have closed out our legacy repurchase reviews with this agreement,” which “represents a fitting conclusion to our year of hard work to put legacy issues in the rear view mirror and begin 2014 focused on improving the future of housing finance,” per the Los Angeles Times.