Business

Wells Fargo to pay $335M to settle FHFA dispute

Wells Fargo & Co. will pay $335 million to resolve claims that it allegedly misled Fannie Mae and Freddie Mac about risky mortgage securities that it sold to them prior to the housing collapse.

The San Francisco bank disclosed in a regulatory filing Wednesday that it settled the claims with Fannie Mae in its first quarter and Freddie Mac in its third quarter. According to the filing, the settlement with the organizations, which fall under the Federal Housing Finance Agency, totaled approximately $335 million.

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The FHFA sued 18 financial institutions in September 2011 over their sales of mortgage securities to Fannie and Freddie, which own or guarantee about half of all US mortgages. These types of securities soured after the housing bubble burst in 2007, losing billions in value.

Associated Press

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