Wells Fargo has cleaned the decks with a 591 million dollar settlement with Fannie Mae after saddling the now government lending institution with billions of dollars in bad loans. This follows Wells Fargo settlement of $869 million dollars with Freddie Mac earlier this year.
Fannie Mae and its sibling firm, Freddie Mac, were seized by the federal government in 2008 as they teetered near bankruptcy because of bad loans they had purchased from banks. The firms bundled the mortgages into securities and could try to force banks to buy back loans that did not meet certain guidelines.
Fannie Mae and Freddie Mac have been aggressively pushing banks to repurchase so-called legacy loans the firms had bought before they were placed under government conservatorship.
“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 Fannie Chief Executive Timothy J. Mayopoulos. via the LA Times
The end of the liar loan era is just about over, and everyone has won except for the middle class. Nobody went to jail, few got fired, the government just printed some more money, and now the problem has all gone away for those who are connected.
For the rest of us, the carnage continues…