Wells Fargo Rumored to Have Wrapped up Bond Claims
According to sources speaking to Bloomberg, an agreement has been reached between Wells Fargo Bank and the Federal Housing Finance Agency (FHFA) to resolve claims that the bank sold faulty mortgage bonds to Fannie Mae and Freddie Mac. The amount of the settlement has not been disclosed but is reported to be less than $1 billion. Bloomberg said the settlement was subject to a confidentiality agreement and thus the source of their story asked not to be named.
Dow Jones Business News said that FHFA had filed 18 lawsuits in 2011 against a number of large financial institutions over $200 billion in mortgage securities sold to the GSEs but never filed suit against Wells Fargo. The parties instead reached an agreement which extended the statute of limitations beyond September 2011 in the event the parties could not reach a settlement.
The FHFA settlement is apparent independent of one Wells Fargo reached with Freddie Mac in October for $780 million. Last spring the bank stated in an SEC filing that it had settled Fannie Mae’s claims over mortgage bonds and stated that the unspecified amount was covered by its reserves. Dow Jones said the bank will likely disclose the terms if not the amount of this settlement in the same manner.
Spokespersons for both Wells Fargo and FHFA refused comment on the story.
Posted on November 5, 2013, in Uncategorized and tagged Bloomberg L.P., Dow Jones & Company, Fannie Mae, Federal Housing Finance Agency, FHFA, Freddie Mac, Government-sponsored enterprise, Wells Fargo. Bookmark the permalink. Leave a comment.