Freddie Mac Announces Settlements Totaling Approximately $5.1 Billion With Bank of America
March 26 2014 - 4:38PM
Marketwired
Freddie Mac Announces Settlements Totaling Approximately $5.1
Billion With Bank of America
MCLEAN, VA--(Marketwired - Mar 26, 2014) - Freddie Mac (OTCQB:
FMCC) today announced that, in conjunction with Fannie Mae and
FHFA, it has entered into an agreement with Bank of America to
settle claims related to investments by Freddie Mac and Fannie Mae
in certain residential non-agency mortgage-related securities
originated, issued or underwritten by Bank of America and certain
affiliates.
Separately, Freddie Mac also entered into a settlement with Bank
of America concerning Freddie Mac claims related to representations
and warranties on single-family loans underlying five Freddie Mac
Structured Pass-Through Certificates (known as
"T-Deals").
Under the agreements, Freddie Mac will receive a total of
approximately $5.1 billion from Bank of America.
"We are pleased that we have resolved this matter with one of
our largest seller/servicer customers and counterparties," said
Freddie Mac CEO Donald H. Layton. "This settlement is an equitable
outcome that allows both Freddie Mac and Bank of America to put
these issues behind us and focus on the future."
Details of the settlement agreements are as follows:
- On March 25, 2014, Fannie Mae, Freddie Mac and FHFA entered
into an agreement with Bank of America and certain affiliates to
settle litigation initiated by FHFA relating to investments by
Fannie Mae and Freddie Mac in certain residential non-agency
mortgage-related securities and to resolve other claims not
included in the FHFA litigation. Under the terms of the
agreement, Bank of America will make a cash payment of
approximately $4.95 billion to Freddie Mac to satisfy these claims
and to purchase from Freddie Mac certain residential non-agency
mortgage-related securities with an unpaid principal balance of
approximately $3.1 billion.
- On March 25, 2014, Freddie Mac entered into an agreement with
Bank of America under which Freddie Mac will release Bank of
America and certain affiliates from existing and future loan
repurchase obligations arising from the origination of mortgage
loans underlying five Freddie Mac T-Deals. In exchange, Bank
of America has agreed to pay Freddie Mac a total of $134 million.
The agreement was approved by FHFA, as Freddie Mac's
Conservator.
Freddie Mac was established by Congress in 1970 to provide
liquidity, stability and affordability to the nation's residential
mortgage markets. Freddie Mac supports communities across the
nation by providing mortgage capital to lenders. Today Freddie Mac
is making home possible for one in four home borrowers and is one
of the largest sources of financing for multifamily
housing. Additional information is available at
FreddieMac.com, Twitter @FreddieMac and Freddie Mac's blog
FreddieMac.com/blog.
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