Wells Fargo has reached a $335 million settlement with the federal government over claims it misled investors about the quality of mortgage-backed securities
Wells Fargo has reached a $335 million settlement with the federal government over claims it misled investors about the quality of mortgage-backed securities.
The lender announced Wednesday that it had reached the settlement with the Federal Housing Finance Agency in the third quarter, according to a Reuters report. The FHFA had alleged that some of the bank’s mortgage bond offering documents had contained false information.
Several other major lenders were sued in 2011 by the FHFA, which alleged that the banks had fraudulently sold shoddy mortgages to Fannie Mae and Freddie Mac. Wells Fargo was the only major bank not sued in 2011 by the FHFA, according to the Charlotte Business Journal. However, Wells did reach an $869 million settlement with Freddie Mac in September over repurchase liabilities, according to Reuters.
The bank was able to settle quietly because it worked to reach a deal with the FHFA before the other suits were filed, according to the Journal. It was also one of the few big banks not accused of outright fraud. The exact terms of the settlement have not been disclosed.
Other banks haven’t been so lucky. Bank of America may be forced to settle with the FHFA for a figure as high as $6bn, according to some reports. JPMorgan Chase, meanwhile, is expected to pay $13bn to settle government claims against it.