Wells Fargo & Co agreed to pay $75m to settle a class-action lawsuit brought by stockholders against Wachovia for misrepresenting the quality of its mortgages, from 2006 through 2008.  The settlement, which must be approved by the courts, involves lawsuits that initially had been filed in 2008, and later were consolidated by U.S District Court in Manhattan.  The lead plaintiffs are various NYC pension funds. Wachovia executives are alleged to have misled investors about underwriting practices in its $120 billion "Pick-A-Payment" loan portfolio in order to "artificially support" the bank's stock price.  These adjustable-rate mortgages, which included a minimum payment option that did not cover all of the interest and principal owed, caused borrowers' balances to increase. The losses started ballooning in early 2008, which undermined the health of Wachovia Corporation and factored into its decision to sell itself to Wells Fargo - at the peak of the financial crisis.   Wells Fargo, itself, does not offer Pick-a-Payment loans.  Wachovia actually inherited the loans when it acquired California-based Golden West Financial Corp in 2006, but Wachovia opted to continue making them available even as the housing market cratered. Attempting to Close the Books on a Bad Acquisition. Today's settlement by Wells Fargo is the latest effort by the 4th largest U.S. bank to resolve lawsuits tied to its 2008 purchase of ailing Wachovia Corporation.   In August, Wells agreed to pay $590mn to large bond investors who made similar allegations that Wachovia had misrepresented the quality of its mortgages. In many ways, Wells Fargo's recent efforts parallel those of Bank of America, which also has worked diligently to close the books on lawsuits related to horrific 2008 acquisition, Countrywide. A year ago, Wells Fargo agreed to pay Citigroup Inc $100 million to settle allegations that it interfered in Citi's unsuccessful attempt to buy most of Wachovia during the 2008 financial crisis.  [Reuters 12/2/11]