Wells Fargo will pay Fannie Mae $591 million in settlement money dating back to when loans fell through and housing prices rose then decreased Zack's Investment Research reported Tuesday.
Wells Fargo is expected to fund $541 million of money previously saved for the reimbursement Zack's reported. This includes adjustments for credits from shares it previously re-acquired or bought back.
"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," Timothy Mayopoulos, Fannie Mae CEO said in a statement The New York Post reported.
The consensus settles loans up until 2008 Zack's reported when Freddie Mac and Fannie Mae were bailed out by banks, and urged financial institutions to re-acquire mortgages that didn't pan out as expected in the era's housing situation Zack's reported. These include repurchase liabilities in conjunction with Fannie Mae, the government's mortgage buyer.
Wells Fargo also came to terms with Freddie Mac in Oct. 2013 with a $780 million cash settlement, with similar adjustments to Tuesday's consensus Zack's reported.
Wells Fargo announced eliminations for 2,300 positions in its mortgage production department in August according to bloomberg.net.
The reduction in staff was about 20 percent of the bank's 11,406 total mortgage loan officers Bloomberg reported.
There have already been other less impacting cuts around the country according to information from individuals who know about the situation.
According to Bloomberg, the bank said mortgage lending would be sluggish the rest of the year since higher interest rates won't trigger people to want to re-finance. Current stats show loan applications comprised 70 percent of the mortgage market during the first half of the year, but went down 20 percent to 50 percent. The number was expected to decline more in the months ahead.
