Wells Fargo will pay $591 million to government-sponsored enterprise (GSE) Fannie Mae to resolve repurchase requests on certain loans originated prior to 2009.
After adjustments for prior repurchases, Wells Fargo will pay Fannie Mae $541 million to resolve the claims. What's more, the bank will be released from repurchase liability for the loans, with certain exceptions.
‘We have closed out our legacy repurchase reviews with this agreement with Wells Fargo,’ says Timothy J. Mayopoulos, president and CEO of Fannie Mae, in a release. ‘This agreement represents a fitting conclusion to our year of hard work to put legacy issues in the rearview mirror and begin 2014 focused on improving the future of housing finance.’
Wells Fargo will remain obligated for certain other contractual responsibilities under the resolution agreement.
Fannie Mae reached resolutions with a number of lenders on repurchase issues and other matters during 2013.
In January, it announced a $10.3 billion agreement with Bank of America including resolution of repurchase issues on certain loans, transfer of servicing rights on 941,000 loans, and repurchase of 30,000 loans. Additionally, the agreement included a $1.3 billion compensatory fee payment for servicing obligations.
In July, it announced a $968 million agreement with CitiMortgage to resolve repurchase issues on certain loans.
In October, it reached a $373 million settlement with SunTrust to resolve repurchase issues on certain loans.
Also in October, the GSE announced resolution of a $670 million agreement with JPMorgan Chase to resolve repurchase issues on certain loans.
In November, Fannie Mae announced a $121.5 million agreement with mortgage servicer Flagstar to resolve repurchase issues on certain loans.
In December, the GSE reached a $140 million settlement deal with PNC Bank to resolve similar claims as well as an $83 million settlement with HSBC Bank to resolve similar claims.
Fannie Mae reports that as of September, it had completed reviews on approximately 94% of the loans delivered from 2005-2008 for underwriting defects that would trigger potential repurchase requests.
The GSE says it expects to complete all reviews by the end of 2013.