Bloomberg reports that the accord includes a one-time $780m cash payment to Freddie Mac, a reduction that reflects credits tied to previous buybacks, Wells Fargo said Monday in a statement. The firm already had set aside money to cover the cost of the agreement, according to the statement.
'We do not expect the company to take an additional charge for this settlement', Joseph Morford, an RBC Capital Markets analyst, wrote in a note to clients. 'We are pleased to see Wells move past more of its outstanding legacy issues, and we believe this should be a slight positive for the stock'.
Home lenders including Bank of America and Citigroup. have sought to resolve claims tied to faulty mortgages sold to Fannie Mae and Freddie Mac, the U.S.-owned firms forced to take a $187.5bn bailout after losses from soured mortgages. Citigroup reached a $395m deal with Freddie Mac last week and announced a $968m settlement with Fannie Mae in July.
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