Wells Fargo, the successor to Wachovia Capital Markets, told a federal court in Wichita, Kan. Friday it should dismiss National Credit Union Administration's (NCUA) suit over MBS Wachovia sold via offering prospectuses.

In a motion to dismiss filed in U.S. District Court, Wells, which bought Wachovia in 2009, said the two corporate giants were well aware that the mortgage underlying $200 million in MBS were subprime loans and of dubious value. Wells notes that in a 2006 prospectus registered with the Securities and Exchange Commission it explained that 73% of the mortgages in the MBS were so-called reduced documentation or “no doc” loans for which the borrower was not required to submit proof of his or her income, assets, or both.

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