One of the government sponsored enterprises (GSEs) has reached what it says will be the last settlement of a repurchase request related to loans it purchased before being placed in government conservatorship. Fannie Mae announced today it will accept $591 million from Wells Fargo in return for releasing the bank, with certain exceptions, from repurchase liability for loans purchased prior to 2009. Wells Fargo will remain obligated for certain other contractual responsibilities under the resolution agreement.
"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."
This marks the eighth repurchase agreement reached between Fannie Mae and lenders regarding repurchase issues and other matters. Since January the GSE has negotiated the following repurchase resolutions:
- $968 million; CitiMortgage;
- $373 million; SunTrust;
- $670 million; J.P. Morgan Chase;
- $121.5 million; Flagstar;
- $140 million; PNC;
- $83 million, HSBC;
- $10.3 billion from Bank of American including $1.3 billion in compensatory fees for servicing obligations.
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.