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11-06-2013, 04:34 PM #1
Wells Fargo Settles With FHFA for $335 Million
Wells Fargo Settles With FHFA for $335 Million
Settlement for Allegedly-Misleading Disclosures on Mortgage Securities Sold to Fannie, Freddie
By SHAYNDI RAICE
Updated Nov. 6, 2013 1:16 p.m. ET
Wells Fargo WFC -0.50% & Co. paid $335 million to the Federal Housing Finance Agency as part of a settlement for allegedly misleading disclosures on mortgage securities the bank sold to Fannie Mae FNMA -2.99% and Freddie Mac, FMCC -2.69%the bank said Wednesday in a regulatory filing.
The fourth-largest U.S. bank by assets joins J.P. Morgan Chase JPM +0.17% & Co. and others in settling recently with the regulator that oversees the mortgage-finance giants. The Wall Street Journal and others reported the settlement last week, but the amount wasn't known at the time.
The bank said the money to pay the settlement had already been set aside.
The FHFA filed 18 lawsuits against the world's largest banks in 2011 seeking unspecified damages on $200 billion in mortgage securities bought by Fannie and Freddie, but never filed a lawsuit against Wells. Instead, the two sides reached an agreement that let the FHFA reserve the right to file a lawsuit after the statute of limitations ran out in September 2011 so that the bank and the regulator could continue settlement talks.
J.P. Morgan Chase settled with the FHFA for $5.1 billion last month. Separately, last week, Ally Financial Inc. said it had reached a settlement with the FHFA and had set aside $520 million for that deal and a separate accord with the Federal Deposit Insurance Corp.
The FHFA is seeking about $6 billion in damages from Bank of America Corp.BAC 0.00% , people familiar with the matter have said, on $57.5 billion in securities.
Wells Fargo wrapped up other settlements in the third quarter. The bank settled for undisclosed sums with the Federal Home Loan Banks of Indianapolis, Chicago and Boston over misleading offering documents tied to mortgage-backed securities. The bank said it had previously set aside the money to cover the settlements.
Write to Shayndi Raice at Shayndi.Raice@wsj.com
http://online.wsj.com/news/articles/...81732009850594NO AMNESTY
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