By Andrew R. Johnson
Ally Financial Inc. is settling lawsuits brought by federal
regulators over mortgage-backed securities as the government-owned
auto lender takes another step toward putting litigation woes
behind it.
The Detroit-based company said Tuesday it will take a $170
million charge in the third quarter for the settlements with the
Federal Deposit Insurance Corp. and Federal Housing Finance Agency,
the regulator for government-backed mortgage-finance firms Freddie
Mac (FMCC) and Fannie Mae (FNMA).
The specific amount and terms of each settlement haven't been
disclosed, said Gina Proia, a spokeswoman for Ally.
The cases brought by the FHFA and FDIC were excluded from a
release Ally received under an agreement it reached this summer
with its subprime mortgage subsidiary, Residential Capital. That
deal, which also included ResCap's creditors, granted Ally a
release from litigation in exchange for a $2.1 billion payment to
ResCap's bankruptcy estate.
"These settlements are key steps in Ally addressing its
remaining legacy mortgage risks," said Michael Carpenter, chief
executive officer of Ally, in a statement.
The FHFA and Freddie Mac will retain some claims against Ally's
banking subsidiary, Ally Bank, as a former mortgage seller and
servicer.
Write to Andrew R. Johnson at andrew.r.johnson@dowjones.com
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