Wells Fargo to adjust some loans from banks it bought

Wells Fargo & Co. has agreed to modify some 14,900 adjustable-rate loans made by banks it acquired, according to filings released Monday by state prosecutors who said the mortgages were harmful to borrowers.

The agreement with the California attorney general’s office will result in more than $2 billion in principal write-downs, interest-rate cuts and other concessions through June 2013, Wells Fargo Home Mortgage chief financial officer Franklin Codel said.

The deal applies to mortgages marketed as “Pick-a-Payment” loans by Charlotte, N.C.-based Wachovia Bank and World Savings Bank, a subsidiary of Oakland, Calif.-based Golden West Financial Corp.

Wachovia bought World Savings in 2006, and San Francisco-based Wells Fargo purchased Wachovia in 2008.

The mortgages were so named because their terms allowed borrowers to make payments at various levels each month.

The payments also ballooned to higher rates after a set period, leaving many borrowers unable to continue paying, Attorney General Jerry Brown said in a statement.

Regulators probing forced resignation of CEO at HP

Federal regulators are investigating the circumstances of Mark Hurd’s forced resignation five months ago as chief executive officer of Palo Alto, Calif.-based Hewlett-Packard.

HP, the world’s biggest maker of personal computers, said it is cooperating with the investigation by the Securities and Exchange Commission, which was earlier reported by The Wall Street Journal.

Hurd’s ouster came after a former HP contractor, Jodie Fisher, accused him of sexual harassment. She also alleged that he told her in advance about HP’s acquisition of Electronic Data Systems in 2008, a person familiar with the matter has told The Associated Press. Fisher later said there were “many inaccuracies” in her claim, and she and Hurd settled.

 Trading is light; market still shows strength this month

Low trading volumes and a lack of economic reports kept stocks confined to a narrow range Monday. Indexes finished mixed and bond yields were barely changed.

Stocks have been rising strongly in December. The Dow has gained 4.3 percent so far this month and the S&P has hit seven new annual highs since Dec. 8.

Investors have been encouraged by improving economic data, consumer confidence and factory production.

Also, President Obama signed a bill last week that will keep Bush-era income tax cuts in place for another two years. The law will also extend favorable tax rates on capital gains and dividends.

 

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