| Sept 30
Sept 30 Wells Fargo & Co said on Monday
it will pay $780 million in cash to Freddie Mac to
resolve substantially all repurchase liabilities on home loans
sold to the government-controlled mortgage company prior to
The largest U.S. mortgage lender said the settlement was
reached on Sept. 27 and totaled $869 million before adjusting
for credits related to prior loan repurchases.
Wells Fargo announced the settlement five days after
Citigroup Inc agreed to pay Freddie Mac $395 million to
settle similar claims over roughly 3.7 million mortgages sold
from 2000 to 2012.
Citigroup is the third-largest U.S. bank by assets, while
Wells Fargo ranks fourth.
Wells Fargo said the cost of its agreement is covered by
On Aug. 7, the San Francisco-based lender estimated a
probable $2.2 billion loss over claims it breached
representations and warranties in the sale of mortgage loans.
It is unclear how much of the latest settlement related to
Wachovia Corp, which Wells Fargo bought at the end of 2008.
Freddie Mac and larger rival Fannie Mae, which
both received federal bailouts in 2008, have pushed banks to buy
back mortgages that soured during the nation's housing downturn.
Banks can be forced to buy back loans if the representations
and warranties over how well the loans were underwritten, and
whether borrowers could afford them, prove false.
Citigroup agreed in July to pay $968 million to settle
repurchase claims by Fannie Mae, while Bank of America Corp
agreed in January to pay $3.6 billion.
Freddie Mac did not immediately respond to a request for
comment. Wells Fargo declined to comment, citing a "quiet
period" ahead of its Oct. 11 release of third-quarter results.