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.

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