News Column

Wells Fargo Settles in Mortgage Bond Dispute

November 6, 2013

Jennifer Bjorhus, Star Tribune (Minneapolis)

wells fargo
Wells Fargo office (file photo)

Nov. 06--Wells Fargo & Co. is paying $335 million to settle claims it misrepresented the quality of mortgage-backed bonds it sold to Fannie Mae and Freddie Mac in the years running up to the housing collapse.

The dollar amount of the combined settlements was contained in the quarterly financial report the bank filed Wednesday with government.

San Francisco-based Wells Fargo declined to discuss the agreement, as did the Federal Housing Finance Agency (FHFA), which oversees Fannie and Freddie.

The settlement is the latest to address the tsunami of toxic mortgages at the heart of the country's housing crisis. The FHFA sued 18 financial institutions in 2011 claiming they misrepresented the private-label mortgage-backed securities it sold to Fannie Mae and Freddie Mac that later went bad.

Wells Fargo avoided the FHFA lawsuits and was not one of the 18 defendants because the bank was already in discussions over the matter with the FHFA.

So far, four of the financial institutions have settled: General Electric Co., Citigroup Inc., UBS Americas Inc. and JPMorgan Chase & Co.

UBS settled for $885 million. JPMorgan settled for $5.1 billion, an amount that also addresses other mortgage-related claims.

Jennifer Bjorhus -- 612-673-4683

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(c)2013 the Star Tribune (Minneapolis)

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Distributed by MCT Information Services

Original headline: BRIEF: Wells Fargo settles mortgage bond dispute for $335 million


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Source: (c)2013 the Star Tribune (Minneapolis)


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