According to the separate announcements, Wells Fargo has agreed to pay $591 million to Fannie Mae to resolve repurchase requests on certain loans originated prior to
2009. Adjusting for prior repurchases, the bank will pay $541 million in Q4 2013. In its own statement, Wells Fargo said it had fully accrued for the cost of the agreement as of the end of the third quarter.
Though the bank—the nation’s biggest home lender—remains on the hook for certain contractual responsibilities, the agreement “resolves substantially all repurchase liabilities” related to the loans covered.
For Fannie Mae, the settlement wraps up a year’s worth of effort resolving legacy problems and allows for a fresh start heading into the new year.
“We have closed out our legacy repurchase reviews with this agreement with Wells Fargo,” said Timothy Mayopoulos, president and CEO of Fannie Mae. “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.”