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Wells Fargo Won’t ‘Pay Up’ to Settle Mortgage Buybacks
Wells Fargo & Co. won’t seek a settlement with Fannie Mae or Freddie Mac on disputed mortgages, and terms offered to rival banks may not have been as generous as some portrayed, Chief Financial Officer Howard Atkins said.
“The quality of our securitizations was of a much higher caliber than all of the other large bank peers,” Atkins said today in an interview. “It doesn’t make sense for us to pay up to get rid of the remaining small amount of problems we have.”
Prodded by lawmakers, Fannie Mae and Freddie Mac have pressed banks including Wells Fargo to buy back mortgages that were based on faulty data about the homes and borrowers. Wells Fargo said today in its fourth-quarter report that demands from the government-owned mortgage companies declined for a second straight quarter and now stand at $1.5 billion.
Wells Fargo set aside $464 million of provisions in the fourth quarter to cover repurchases and spent $506 million for buybacks. The San Francisco-based company’s repurchase reserve stood at $1.29 billion at the end of December, down from $1.33 billion on Sept. 30. Atkins cited the reserve during a conference call with analysts today as one reason the bank didn’t need to settle.
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