The provisions set aside to cover potential loan repurchase requests at Wells Fargo & Co. (WFC) grew 15% during the third quarter, according to the company’s earnings report.

At the beginning of the period, the company put repurchase liability at roughly $1.8 billion. By quarter’s end, that number grew roughly 15% to $2.03 billion.

Still, the bank added fewer reserves to hedge buyback risk in 3Q, increasing its reserve only $462 million during the period. That’s down from the $669 million buffer added to its repurchase-risk reserves in the second quarter. 

By September 30, the number of GSE loans subjected to unresolved repurchase requests hit 6,525 loans. In addition, 1,513 private loans are classified as potential repurchase risks, while 817 loans under Wells Fargo’s umbrella remain at risk of mortgage insurance rescissions—or insurer buyback requests.

Still, Wells Fargo executives on a conference call remained positive about repurchase risk, suggesting the need to add fewer repurchase reserves in 3Q was an improvement.

They also point to the housing recovery, which if it continues, can buoy home values giving borrowers more equity in their homes.

Furthermore, as the deadline for the statute of limitations grows nearer for loans originated in 2006 and 2007, repurchase risk and related litigation could decline, the executives suggested.

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