Wells Fargo & Co., the largest U.S. home lender, agreed to pay Fannie Mae $591 million to resolve repurchase demands on loans originated before 2009 and sold to the government-backed firm.
Wells Fargo paid $541 million in cash to Fannie Mae after adjusting for prior repurchases, the San Francisco-based lender said today in a statement. The firm had set aside funds to cover the full cost as of Sept. 30, according to the statement.
Lenders from Wells Fargo to Bank of America Corp. 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 $869 million 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 Fannie Mae. The agreement concludes Fannie Mae’s review of “legacy” loans sold to it by mortgage lenders, the firm said.
“This agreement 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,” Timothy J. Mayopoulos, Fannie Mae’s chief executive officer, said in the firm’s statement.