Wells Fargo & Co. settled with the Federal Housing Finance Agency for allegedly misleading disclosures on mortgage securities the bank sold to Fannie Mae and Freddie Mac, according to people familiar with the matter.
The fourth-largest U.S. bank by assets joins J.P. Morgan Chase & Co. and others in settling recently with the regulator that oversees the mortgage-finance giants.
The FHFA filed 18 lawsuits against the world's largest banks in 2011 seeking unspecified damages on $200 billion in mortgage securities bought by Fannie and Freddie, but it never filed a lawsuit against Wells Fargo. Instead, the two sides reached an agreement that let FHFA reserve the right to file a lawsuit after the statute of limitations ran out in September 2011 so that the bank and the regulator could continue settlement talks.
The bank will likely disclose the settlement in an upcoming regulatory filing, people familiar with the matter said. The sum of the settlement likely won't be disclosed, they added. It's unclear whether they will admit or deny any specific behavior.
The news was reported earlier by The Financial Times.
Wells Fargo settled similar claims with Freddie Mac for $780 million last month to resolve separate disputes over shaky home loans. The bank also settled in the first quarter of the year with Fannie Mae for an undisclosed sum, according to its regulatory filing at the time. The bank said the money to pay the settlement had already been set aside.
J.P. Morgan Chase settled with the FHFA for $5.1 billion last week. Separately, on Tuesday, Ally Financial Inc. said it had reached a settlement with the FHFA and had set aside $520 million for that deal and a separate accord with the Federal Deposit Insurance Corp.
The FHFA is seeking about $6 billion from Bank of America Corp., people familiar with the matter have said.
Bank of America, which acquired Countrywide Financial Corp. and Merrill Lynch & Co., faces potentially the largest tab, because FHFA has sued over $57.5 billion in securities. Other banks with the largest amount of securities under dispute include the Royal Bank of Scotland Group PLC, with $30.4 billion, and Deutsche Bank, with $14.2 billion.
The FHFA, whose primary mission is to ensure Fannie and Freddie operate in a "safe and sound manner," has also become their biggest legal advocate. With the companies effectively owned by the U.S. government as a result of their 2008 conservatorship, FHFA has aggressively pursued money it says is owed to Fannie and Freddie--and the taxpayers who funded their twin bailouts.
-Andrew Johnson contributed to this article.
Write to Shayndi Raice at Shayndi.Raice@wsj.com and Nick Timiraos at Nick.Timiraos@wsj.com