Wells Fargo, Fannie Mae reach $591M settlement

Wells Fargo has agreed to pay Fannie Mae $591 million to settle repurchase demands over precrisis mortgages it sold to the housing giant.

The deal, announced Monday, marks the latest resolution struck by either Fannie or the smaller Freddie Mac to put to rest lingering issues from risky mortgages packaged and sold in the buildup to the financial crisis.

{mosads}According to Fannie, the agreement with Wells Fargo, the nation’s largest home lender, draws to a close its lingering issues over pre-2009 mortgages.

“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,” said Timothy Mayopoulos, Fannie’s president and CEO, in a statement.

All told, Fannie Mae has brought in more than $12 billion from some of the nation’s largest banks to help address losses the government-sponsored enterprise suffered during the housing downturn.

The collapse in the mortgage market ultimately resulted in Fannie and Freddie being rescued by the government, and now policymakers are searching for a way to overhaul the nation’s housing finance market in a way that ultimately erases the two enterprises.

In January, Fannie struck a $10.3 billion deal with Bank of America and a separate $968 million deal in July with CitiMortgage, the housing arm of Citigroup. Fannie received $670 million from JPMorgan in October to settle its own issues with precrisis mortgages.