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.
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