Citigroup To Pay Fannie Mae Nearly $1B To Settle Mortgage Claims

Posted by Patrick Barnard on July 01, 2013 No Comments
Categories : Residential Mortgage

13954_cash Citigroup To Pay Fannie Mae Nearly $1B To Settle Mortgage Claims Citigroup Inc. has reportedly agreed to pay government-sponsored enterprise (GSE) Fannie Mae $968 million to settle potential future repurchase claims on 3.7 million residential first mortgage loans originated between 2000 and 2012.

The agreement covers potential future origination-related representation and warranty claims.

The settlement does not release liability on a group of less than 12,000 loans with certain characteristics, such as those that came with a performance guaranty or which were sold under special credit enhancement programs.

Citi claims it has the reserves needed to cover the loans not covered under the agreement. The bank said it would continue to work with Fannie Mae on the timely repurchase of any loans that do not meet the GSE's requirements.

‘This resolution is an example of our desire to work together with our business partners to find common ground,’ said Bradley Lerman, executive vice president and general counsel of Fannie Mae, in a statement. ‘Today's agreement resolves legacy repurchase issues, compensates taxpayers for losses and allows Fannie Mae and Citi to move forward and strengthen our business relationship.’

‘We have a strong and productive relationship with Fannie Mae,’ said Jane Fraser, CEO of CitiMortgage. ‘This agreement resolves substantially all potential future repurchase claims from them for loan originations from 2000 to 2012. As we work to deepen and enhance financial relationships with our clients, we will continue to focus on the production of high-quality mortgage loans.’

In January, Bank of America paid $11.6 billion to Fannie Mae to settle claims resulting from mortgage-backed investments that soured during the housing crash.

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