Citi agrees to pay $395m to resolve Freddie Mac repurchase claims

Citigroup has agreed to pay Freddie Mac $395m to resolve repurchase claims on soured mortgages sold to the government-backed firm over more than a decade.

Bloomberg reports that the accord covers about 3.7m loans sold to Freddie Mac between 2000 and 2012, the New York-based company said yesterday in a statement.

The payment was covered by repurchase reserves as of June 30, Citigroup said.

The biggest U.S. home lenders, including Bank of America Corp. and Citigroup, faced mounting pressure after the housing crisis to resolve claims on faulty mortgages sold to Fannie Mae and Freddie Mac, the U.S.-owned firms that took a $187.5bn bailout. Citigroup announced a deal in July to pay Fannie Mae $968m for loans over a similar period.

The deal with Freddie Mac is 'another important milestone in successfully resolving Citi’s remaining legacy mortgage issues', Jane Fraser, chief executive officer of the firm’s CitiMortgage unit, said in the statement.

The accord doesn’t release the bank from liability tied to servicing the loans. It excludes less than 1,000 loans from the period with 'certain characteristics', including those already in the process of being repurchased. Citigroup said it believes it’s also adequately reserved for those.

To access the complete Bloomberg article hit the link below

Citigroup to Pay Freddie Mac $395 Million to End Mortgage Claims

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