Wells Fargo settles mortgage bonds issues with FHFA
In an agreement to settle claims with the Federal Housing Finance Agency, Wells Fargo agreed to pay less than USD1 billion to resolve the issue on the bank's alleged knowledge of the faulty nature of mortgage bonds sold to Fannie Mae and Freddie Mac. This was confirmed by a person briefed on the deal.
According to the deal with the government agency regulating government backed mortgage finance firms, there would be a confidentiality agreement to be signed between the parties. This was confirmed by the person who spoke on condition of anonymity specifically because of the clauses included in the said agreement.
Previously, Wells Fargo, which is based out of San Francisco, CA, said in its May regulatory filings that it had entered into a settlement agreement with Fannie Mae over the said mortgage issues. It also said that the settlement amount, which was not disclosed, would be paid out of the bank's reserves but quarters say is less than USD1 billion.
Both Wells Fargo spokeswoman Mary Eshet and FHFA spokeswoman Stefanie Johnson declined to provide a comment on the matter.