Wells Fargo Says SEC Concludes Probe of MBS
Wells Fargo, the nation’s largest residential lender and servicer, said federal regulators plan to forgo recommending enforcement action after completing a probe of offering documents for mortgage-backed securities.
The U.S. Securities and Exchange Commission notified Wells Fargo on Nov. 20 that the previously announced probe was over, the San Francisco-based bank said yesterday in a regulatory filing. The firm said Feb. 28 that it received a so-called Wells notice, a warning that regulators may recommend enforcement.
It’s at least the second time in less than four months that the SEC has dropped an investigation into the marketing of mortgage-backed securities by the largest U.S. banks. The agency told Goldman Sachs Group Inc. on Aug. 6 that it had closed a probe and no longer planned to pursue claims against the New York-based company, according to a filing.
Wells, which revealed the SEC’s warning in its 2011 annual report, said at the time the government was examining whether it properly described facts and risks in offering documents for mortgage-backed debt.
Regulators are still examining how banks packaged and sold home loans to investors, more than four years after mounting mortgage defaults prompted government bailouts of the financial system. Goldman Sachs paid $550 million in 2010 to settle SEC claims that it misled investors on a mortgage-linked investment in 2007. In that case, the company said it made a “mistake” in omitting disclosures.