The bank acted as trustee for 271 RMBS trusts created between 2004 and 2008
Wells Fargo Bank has agreed to pay $43 million to resolve two class-action lawsuits in federal and state court related to its role as trustee for hundreds of residential mortgage-backed securities (RMBS) trusts created more than a decade ago.
The settlement resolves claims regarding the fulfillment of Wells Fargo’s duties as trustee for 271 RMBS trusts created between 2004 and 2008. Wells Fargo’s duties were limited to administering the trusts, and it had no role in the origination or servicing of the mortgages at issue.
The bank entered the settlement with a group of institutional investors, including funds affiliated with BlackRock and PIMCO.
The settlement also resolves a related action seeking declaratory relief against Wells Fargo as well as claims by Wells Fargo against certain investment advisors. The agreement is subject to approval by the court.
“Consistent with our sound business practices, we believe that we appropriately fulfilled our duties as trustee by performing the responsibilities prescribed in the relevant contracts for these decade-old trusts,” said Troy Kilpatrick, head of Wells Fargo Corporate Trust Services. “While we disagree with the allegations, it is in the best interest of all parties to put this protracted litigation behind us and we are satisfied with this settlement.”
Separate lawsuits filed by other institutional investors concerning 58 trusts are not covered by the agreement.
