Wells Fargo Reaches $591MM Agreement With Fannie Mae
Fannie Mae said it has reached a $591 million agreement with Wells Fargo to resolve repurchase requests on certain loans originated prior to 2009. After adjustments for prior repurchases, Wells Fargo will pay Fannie Mae $541 million in the fourth quarter of 2013 and be released from repurchase liability for these loans, with certain exceptions.
“We have closed out our legacy repurchase reviews with this agreement with Wells Fargo,” said Timothy J. 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.”
Wells Fargo will remain obligated for certain other contractual responsibilities under the resolution agreement.
In addition to its agreement with Wells Fargo, Fannie Mae has reached resolutions this year with a number of lenders on repurchase issues and other matters. These agreements have been reached with eligible lenders of all sizes, including:
•A $10.3 billion agreement announced in January 2013 with Bank of America including resolution of repurchase issues on certain loans, transfer of servicing rights on 941,000 loans, and repurchase of 30,000 loans by Bank of America. Additionally, the agreement included a $1.3 billion compensatory fee payment for servicing obligations.
•A $968 million agreement announced in July 2013 with CitiMortgage to resolve repurchase issues on certain loans.
•A $373 million agreement announced in October 2013 with SunTrust to resolve repurchase issues on certain loans.
•A $670 million agreement announced in October 2013 with J.P. Morgan Chase to resolve repurchase issues on certain loans.
•A $121.5 million agreement announced in November 2013 with Flagstar to resolve repurchase issues on certain loans.
•A $140 million agreement with PNC reached in December 2013 to resolve repurchase issues on certain loans.
•An $83 million agreement with HSBC Bank USA, N.A. reached in December 2013 to resolve repurchase issues on certain loans.
Fannie Mae disclosed in its most recent 10-Q filing that as of September 30, 2013, it had completed reviews on approximately 94 percent of the loans delivered from 2005-2008 for underwriting defects that would trigger potential repurchase requests and that the company expects to complete those reviews by the end of 2013.
To read Fannie Mae’s full news release click here.