Wells Fargo, the fourth largest U.S. bank by assets, has announced it may be forced to buy back an additional $1.8 billion in failed mortgages, on top of the already billions of repurchase calls it has already received. The latest call for buybacks comes from investors outside the initial investors which requested buybacks. A Wells Fargo representative stated that in a worst case scenario mortgage repurchase claims could potentially exceed the reserves the bank set aside to deal with repurchase requests.
The repurchase requests come from the origination and securitization of sub-prime loans that have defaulted and in turn become toxic. Investors in mortgage backed securities can require a bank to buy back loans if the underlying mortgages do not comply with the representations and/or warranties made by the bank at the time the securities were purchased. Wells Fargo is the largest U.S. Bank to project its worst case scenario, but Wells Fargo repurchase claims have declined for the four quarters since the second quarter of 2010.
Wells Fargo is just one of the national banking giants that is facing and will continue to face billions of dollars in mortgage repurchase requests stemming from its actions in originating mortgages it knew would go bad. If you are facing a Florida Foreclosure Lawsuit from Wells Fargo, contact a Florida Foreclosure Defense Lawyer or a Jacksonville Foreclosure Defense Lawyer today.
