Wells Fargo & Co. on Monday agreed to modify more than $2 billion of risky payment option ARMs from two lenders that the mega bank bought during the last years of the decade: World Savings of Oakland, and Wachovia Corp. of Charlotte.

In a settlement brokered through California governor-elect Edmund "Jerry" Brown, Wells will modify roughly 14,900 California borrowers, granting what the state called "significant principal forgiveness."

Subscribe Now

Access to a full range of industry content, analysis and expert commentary.

30-Day Free Trial

No credit card required. Access coverage of the securitization marketplace, including breaking news updated throughout the day.