Wells Fargo is actively marketing a $416 million portfolio of nonperforming payment option ARMs — legacy loans it inherited when it bought Wachovia Corp. last year.

According to one investor familiar with the offering, some of the mortgages have loan-to-value ratios of up to 105%. He also said Wells, initially, is asking 70 cents on the dollar for some of the pools. A hedge fund manager, requesting anonymity, said he is reviewing the Wells offering and thinks eventually it could sell for 40 cents on the dollar.

He described the portfolio as "not very good." A spokesman for Wells confirmed to National Mortgage News that the portfolio is out in the market, but declined to provide specifics.

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