Wells Fargo & Company WFC and nine other mortgage servicers have
entered into settlement agreements with the Office of the Comptroller of the
Currency (OCC) and the Federal Reserve Board (FRB) that would end their
Independent Foreclosure Review (IFR) programs created by Article VII of an
April 2011 Interagency Consent Order and replace it with an accelerated
remediation process. Wells Fargo issued the following statement regarding the
agreements.
Wells Fargo's portion of the cash settlement will be $766 million, which is
based on the proportionate share of Wells Fargo-serviced loans in the overall
IFR population. Wells Fargo expects to record a pre-tax charge of
approximately $644 million in the fourth quarter of 2012 to fully reserve for
its cash payment portion of the settlement and additional remediation-related
costs. Wells Fargo will commit an additional $1.2 billion to foreclosure
prevention actions. This commitment will not result in any charge as the
Company believes that the commitment is covered through the existing allowance
for credit losses and the nonaccretable difference relating to our purchased
credit-impaired loan portfolio. The Company will report its fourth quarter
2012 results on January 11, 2013.
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