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Wells Fargo to Pay $24M to End Mortgage Probe

By: AP
By: AP

Washington (AP) --

Wells Fargo has agreed to pay $24 million to end an investigation by eight states probing whether the company made risky mortgages to consumers without disclosing their perils.

The states charged that loans known as option adjustable rate
loans, or "pick-a-payment" mortgages, were deceptive to
borrowers. Those particularly toxic loans allowed borrowers to
defer some of their interest payments and add them to the principal
balance.

Wells Fargo & Co. says it reached an agreement with attorneys
general in Arizona, Colorado, Florida, Illinois, Nevada, New
Jersey, Texas and Washington state. The loans were made by Wachovia Corp. and a California company it acquired, World Savings Bank.

San Francisco-based Wells purchased Wachovia during the
financial crisis two years ago.


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