Boston, MA 08/12/2014 (wallstreetpr) – Wells Fargo & Co (NYSE:WFC) announced recently that it agreed to sell approximately $1.3 billion in the troubled mortgage debt. The sale shall be made in support of and on behalf of the regional bank-associated clients.
Marketing of Two Pools
In an interview with Bloomberg, a person close to the matter knowledge said that Wells Fargo & Co (NYSE:WFC), at present, is marketing two pools, both of which include mostly the re-performing loans and also the non-performing loans. The sale has still been kept private.
The offering made by Wells Fargo includes one pool of approximately $630 million and the other of approximately $700 million. The amount in the first pool is the one which represents an unpaid principal balance.
Sales of soured property Loans increasing
It must be noted that the sales of soured property loans is increasing because of an increase in the demand from private equity firms as well as hedge funds; which in turn give a push to not just the financial regulations, but also the prices and this forces banks to guarantee more capital in place of a few assets which they possess.
The sales of mortgages in the U.S. are on increase because the lenders are rushing for meeting demand from aforesaid private-equities and hedge funds.
Addition to the Supply
The mortgage giant, which is Government assisted, Freddie Mac further adds on to the supply. Yet another body adding to the supply includes Department of Housing and Urban Development. This Department has auctioned loans in order to stem losses arising at Federal Housing Administration.
In the meanwhile, spokeswoman of Wells Fargo & Co (NYSE:WFC), Elise Wilkinson, declined to say anything on the offerings of bank, when approached by Bloomberg.
In a similar kind of story, yet another bank, the Bank of America Corp (NYSE:BAC) is also marketing the bad debts with the balance worth approximately $3 billion.