Washington Mutual to Sell $140 Billion in Mortgage Servicing and Milwaukee Servicing Operations to Wells Fargo

Washington Mutual, Inc. (NYSE:WM) and Wells Fargo &Company (NYSE:WFC) have entered into a definitive agreement to sellWashington Mutual's entire portfolio of government mortgage servicingand a portion of its conforming, fixed-rate servicing portfolio --totaling approximately $140 billion and representing approximately 1.3million servicing customers -- to Wells Fargo. As part of thetransaction, Washington Mutual will transfer to Wells Fargo itsMilwaukee servicing operations. The effective date of the sale isexpected to be July 31, 2006. Terms of the transaction were notdisclosed.

To help ensure a smooth transition for customers, the twocompanies agreed to transfer to Wells Fargo the majority of WashingtonMutual's loan servicing and support staff at its Milwaukee operationswith the transfer of servicing. The loan servicing and supportemployees who will join Wells Fargo are expected to transfer to WellsFargo from the fourth quarter of 2006 through the first quarter of2007.

"The sale is consistent with Washington Mutual's strategy todeploy capital for maximum return and to focus our Home Loans businesson higher margin products, while improving operating efficiency andreducing Mortgage Servicing Rights as a percentage of capital. Thesale will also appropriately balance our servicing portfolio with ourorigination franchise," said Steve Rotella, Washington Mutual'spresident and chief operating officer.

"We're also very pleased that including the Milwaukee supportoperations in this transaction will provide continued employment forthe majority of our employees who have contributed to our servicingsuccess," said David Schneider, president of Washington Mutual's HomeLoans Group. "Rather than shifting our product mix over time, sellingthis portion of our loan servicing portfolio, which is predominatelymortgage-only customers, allows us to execute on our Home Loansproduct strategy faster while ensuring a seamless transition. Ourtotal servicing portfolio will include approximately 4 millioncustomers with outstanding principal balance of $692 billion at thecompletion of this sale."

"We welcome these 1.3 million mortgage servicing customers toWells Fargo and the valued team members who will join us to servethem," said Mark Oman, senior EVP of Wells Fargo & Company and head ofthe Home and Consumer Finance Group. "This acquisition will furtherleverage the operating scale of our servicing business. Consistentwith our vision to satisfy all our customers' financial needs, we lookforward to building relationships with these customers so we can bethere when they need their next financial product. We have a proventrack record of earning more business from new customers. After thispurchase, our total servicing portfolio will grow to 7.5 millioncustomers with outstanding principal balances of approximately $1.25trillion, served by team members from seven locations across thecountry."

"We expect this transaction to exceed our required internal rateof return even before factoring in any cross-sell to these newcustomers," said Howard Atkins, Wells Fargo & Company's chieffinancial officer. "With this additional servicing we'll continue tohave a good balance between originations and servicing in our mortgagebusiness and a healthy diversity of revenue sources, including ourmortgage business, for our company as a whole."

Wells Fargo grew its mortgage servicing portfolio at a compoundannual growth rate of 25 percent since 1995. By comparison, thisacquisition will increase Wells Fargo's mortgage servicing portfolioby 13 percent.

Lehman Brothers and Kirkpatrick & Lockhart Nicholson Graham LLPwere advisors to Washington Mutual on the transaction.

About Washington Mutual

Washington Mutual, through its subsidiaries, is one of thenation's leading consumer and small business banks. At June 30, 2006,Washington Mutual and its subsidiaries had assets of $350.70 billion.The company has a history dating back to 1889 and its subsidiary bankscurrently operate more than 2,600 consumer and small business bankingstores throughout the nation. Washington Mutual's press releases areavailable at www.wamunewsroom.com.

About Wells Fargo

Wells Fargo & Company is a diversified financial services companywith $500 billion in assets, providing banking, insurance,investments, mortgage and consumer finance to more than 23 millioncustomers from more than 6,200 stores and the Internet(wellsfargo.com) across North America and elsewhere internationally.Wells Fargo Bank, N.A. is the only bank in the United States toreceive the highest possible credit rating, "Aaa," from Moody'sInvestors Service.

Cautionary Note About Forward-Looking Statements

In accordance with the Private Securities Litigation Reform Act of1995, we caution you that this news release contains forward-lookingstatements about Washington Mutual and Wells Fargo, including (1) theexpected effective date of the transaction, (2) the expectedpercentage of Washington Mutual loan and servicing employees who willjoin Wells Fargo as part of the transaction and when they are expectedto join, (3) Wells Fargo's expectation that the transaction will meetits required internal rate of return, and (4) Wells Fargo'sexpectations as to the balance of its mortgage originations andservicing and the diversity of its revenue sources after thetransaction. Do not unduly rely on forward-looking statements. Theygive Washington Mutual's or Wells Fargo's expectations, as the casemay be, about its future and are not guarantees. The forward-lookingstatements speak only as of the date of this press release, andneither Washington Mutual nor Wells Fargo undertakes to update them toreflect changes that occur after that date. For factors that may causeactual results to differ from Washington Mutual's or Wells Fargo'sexpectations, refer to the company's Annual Report on Form 10-K forthe year ended December 31, 2005 and Quarterly Report on Form 10-Q forthe quarter ended March 31, 2006.