Wells Fargo Said to Offer $1.3 Billion in Banks’ Bad Debt

Wells Fargo & Co. (WFC) is selling about $1.3 billion in troubled mortgage debt on behalf of regional bank clients, said two people with knowledge of the offering.

Wells Fargo is marketing two pools made up of mostly reperforming loans as well as nonperforming loans, said the people, who asked not to be identified because the sale is private. The offering includes a pool of about $630 million in unpaid principal balance, and another of about $700 million, one of the people said.

Sales of soured U.S. property loans are accelerating as increased demand from hedge funds and private-equity firms push up prices and financial regulations force banks to pledge more capital for some assets they hold. Government-backed mortgage giant Freddie Mac is adding to the supply, along with the Department of Housing and Urban Development, which has been auctioning loans to stem losses at the Federal Housing Administration.

Elise Wilkinson, a spokeswoman for San Francisco-based Wells Fargo, declined to comment on the bank’s offering.

To contact the reporters on this story: Heather Perlberg in Washington at hperlberg@bloomberg.net; Dakin Campbell in New York at dcampbell27@bloomberg.net

To contact the editors responsible for this story: Kara Wetzel at kwetzel@bloomberg.net Daniel Taub

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.