Wells Fargo & Co , the largest U.S. mortgage lender, said it is likely to face fines from regulators and other government agencies as a result of a probe into the industry's foreclosure practices.

The bank may also face charges from the U.S., it said in its annual filing with securities regulators.

Bank of America Corp said the wide-ranging probe could lead to significant legal costs in 2011, according to its annual report filed on Friday with U.S. securities regulators.

The largest U.S. bank by assets said it could not predict the outcome of the various investigations now being conducted by state and federal authorities, but said the probes could result in enforcement actions or various fines and penalties.

Sources familiar with discussions among federal authorities have said they could seek as much as $20 billion in total from lenders to settle the foreclosure probe, which began last fall.

Analysts said Wells Fargo's acknowledgment of its potential foreclosure liability highlights the continuing struggles of the largest U.S. banks.

Are they trying? Sure, but this is not an easy fix and these kinds of problems are going to hang around the banks for years, said Matt McCormick, a portfolio manager with Cincinnati-based Bahl & Gaynor Investment Counsel.

McCormick said he has sold nearly all of his U.S. bank holdings because of concerns over foreclosures and other losses.

Critics alleged banks used robo-signers -- employees who approved thousands of foreclosures without reviewing the documentation -- and incomplete paperwork to repossess homes. The bad documentation threatens to slow down the foreclosure process and potentially invalidate some repossessions.

In October, Wells Fargo joined other large mortgage lenders when it announced plans to amend 55,000 foreclosure filings nationwide, amid signs that documentation for some foreclosures was incomplete or incorrect.

Other banks echoed San Francisco-based Wells Fargo's assessment in a wave of annual report filings with the Securities and Exchange Commission on Friday.

Atlanta-based SunTrust said it expects regulators may issue a consent order, which will require the largest mortgage lenders to fix problems with their foreclosure processes, and potentially levy fines.

Separately, Wells Fargo earlier this month in a surprise announcement said that Chief Financial Officer Howard Atkins, 60, would retire after taking nearly half a year of unpaid leave that would began immediately at the time of the announcement.

The bank said that Atkins was retiring for personal reasons unrelated to the bank's financial reporting or condition.

Wells Fargo shares closed 3.1 percent higher at $32.40 on the New York Stock Exchange. Bank of America shares closed 1.6 percent higher at $14.20, also on the New York Stock Exchange.

(Reporting by Joe Rauch, additional reporting by Clare Baldwin; Editing by Gary Hill, Bernard Orr)

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