Company: WFC-PC
Filing Date: 2025-04-29
Form Type: 10-Q
Source: 0000072971-25-000129
Chunk: 174

Company: WELLS FARGO & COMPANY/MN
Filing Date: 2025-04-29
Form: 10-Q
Item: Item 13
Chunk 174
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Note 13:  Securitizations and Variable Interest EntitiesInvolvement with Variable Interest Entities (VIEs)In the normal course of business, we enter into various types of on- and off-balance sheet transactions with special purpose entities (SPEs), which are corporations, trusts, limited liability companies or partnerships that are established for a limited purpose. SPEs are often formed in connection with securitization transactions whereby financial assets are transferred to an SPE. SPEs formed in connection with securitization transactions are generally considered variable interest entities (VIEs). The VIE may alter the risk profile of the asset by entering into derivative transactions or obtaining credit support, and issues various forms of interests in those assets to investors. When we transfer financial assets from our consolidated balance sheet to a VIE in connection with a securitization, we typically receive cash and sometimes other interests in the VIE as proceeds for the assets we transfer. In certain transactions with VIEs, we may retain the right to service the transferred assets and repurchase the transferred assets if the outstanding balance of the assets falls below the level at which the cost to service the assets exceed the benefits. In addition, we may purchase the right to service loans transferred to a VIE by a third party.In connection with our securitization or other VIE activities, we have various forms of ongoing involvement with VIEs, which may include:•underwriting securities issued by VIEs and subsequently making markets in those securities;•providing credit enhancement on securities issued by VIEs through the use of letters of credit or financial guarantees;•entering into other derivative contracts with VIEs;•holding senior or subordinated interests in VIEs;•acting as servicer or investment manager for VIEs; •providing administrative or trustee services to VIEs; and•providing seller financing to VIEs.Loan Sales and Securitization ActivityWe periodically transfer consumer and commercial loans and other types of financial assets in securitization and whole loan sale transactions.MORTGAGE LOANS SOLD TO GOVERNMENT SPONSORED ENTERPRISES AND TRANSACTIONS WITH GINNIE MAE.  In the normal course of business we sell residential and commercial mortgage loans to GSEs. These loans are generally transferred into securitizations sponsored by the GSEs, which provide certain credit guarantees to investors and servicers. We also transfer mortgage loans into securitization pools