Wells Fargo & Co., the largest U.S. home lender, said faulty mortgages could cost the company as much as $2.4 billion beyond its reserves, an increase of $300 million from a year earlier. The bank also trimmed its estimate of possible legal costs.

The projected expense for refunds on loans sold to investors represents the worst case for “reasonably possible losses in excess of our recorded liability,” the San Francisco-based company said today in its annual regulatory filing. At the same time, Wells Fargo reduced the maximum for potential litigation losses beyond its reserves to $1 billion from $1.2 billion. The estimates reflect data as of Dec. 31.

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Banks including Wells Fargo, run by Chief Executive Officer John Stumpf, have spent almost $100 billion to clean up defective mortgages and improper foreclosures since 2007, according to data compiled by Bloomberg.

Wells Fargo previously said it set aside $1.67 billion in reserves last year to cover the cost of buying back mortgages from investors. Banks typically agree to give refunds if errors are later found in documents supporting the loans, such as appraisals or a borrower’s income.

In January, the bank agreed to contribute $766 million in cash and $1.2 billion for foreclosure prevention as the industry settled U.S. accusations that lenders seized homes using faulty or faked documents.