Wells Fargo Bank, the biggest mortgage lender in the U.S., agreed yesterday to pay $541 million to Fannie Mae in order to settle allegations over troubled home loans.
The settlement was for a total of $591 million, but has been reduced due to credit from previous loan buybacks by the banks. As part of the same set of deals with the government-sponsored entity, Citigroup agreed to pay $968 million and Bank of America $3.6 billion, earlier this year.
Eight leading lenders have settled with Fannie, for a total of $6.5 billion, according to Reuters. This latest deal ends the GSE’s attempts to make recompense for bad mortgage products it bought on the lead up to the recession.
“We have closed out our legacy repurchase reviews with this agreement,” Timothy Mayopoulos, chief executive of Fannie Mae, said in a statement, as Reuters reported. “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.”
The Federal Housing Finance Agency has also filed suits against several banks regarding mortgage-backed securities acquired by Freddie Mac and Fannie Mae that they allege were improperly marketed.
Wells Fargo Bank recently teamed up with Criterion Real Estate Capital to provide $525 million in acquisition financing to enable the Witkoff Group and Jynwel Capital to buy Manhattan’s Helmsley Park Lane Hotel. [Reuters] — Mark Maurer