Wells Fargo has agreed to pay $541m to the Federal National Mortgage Association (Fannie Mae) to settle claims of offering defective home loans that were originated before 1 January 2009.

The amount, which will be paid in cash in the fourth quarter of 2013, will resolve all the repurchase claims against Well Fargo.

Fannie Mae CEO and president, Timothy Mayopoulos, said they have closed out their legacy repurchase reviews with this agreement with Wells Fargo.

The company also announced that throughout the year, they have settled deals worth around $6.5bn over loan buybacks with eight banks including Bank of America (BofA), CitiMortgage, SunTrust, JPMorgan Chase, Flagstar, PNC, and HSBC Bank USA.

Mayopoulos said the current agreement represents a fitting conclusion to their year of hard work to put legacy issues in the rear view mirror and begin 2014 focused on improving the future of housing finance.

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