Banking

Wells Fargo to Pay Fannie Mae $591 Million over Loan Claims

Connected to the mortgage bubble

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Wells Fargo & Co., the largest U.S. home lender, agreed to pay Fannie Mae $591 million to resolve repurchase demands on loans originated before 2009 and sold to the government-backed firm.

Wells Fargo paid $541 million in cash to Fannie Mae after adjusting for prior repurchases, the San Francisco-based lender said today in a statement. The firm had set aside funds to cover the full cost as of Sept. 30, according to the statement.

Lenders from Wells Fargo to Bank of America Corp. have agreed to pay Fannie Mae and its smaller competitor, Freddie Mac, for losses on soured mortgages as they seek to cap costs on loans originated before the housing crash. Wells Fargo reached a $869 million accord with Freddie Mac in September to resolve disputes on a similar subset of loans.