Wells Fargo will pay a net $541 million to Fannie Mae to settle claims over defective home loans, completing the government-controlled mortgage company's efforts to have banks buy back troubled loans made before the financial crisis.
Fannie Mae said on Monday it has reached settlements worth roughly $6.5 billion over loan buybacks with eight banks, including Wells Fargo, the nation's largest mortgage lender and fourth-largest bank by assets.
The settlements include a $3.6 billion accord in January with Bank of America over loans from that bank and the former Countrywide Financial. Fannie Mae Chief Executive Timothy Mayopoulos was once general counsel at Bank of America.
It also includes a $968 million accord in July with Citigroup.
In the Wells Fargo settlement, the San Francisco-based bank will pay Fannie Mae $541 million in cash after adjusting for credits from prior repurchases. Before adjustments, the settlement totaled $591 million.
The accord resolves substantially all repurchase claims against Wells Fargo over loans sold to Fannie Mae that were made before 2009.