Societe Generale Settles With FHFA For $122 Million

Posted by Patrick Barnard on February 27, 2014 No Comments
Categories : Residential Mortgage

Societe Generale will pay $122 million to settle claims brought by the Federal Housing Finance Agency (FHFA) that the bank sold faulty or poorly underwritten mortgages to government-sponsored enterprises Fannie Mae and Freddie Mac.

Under the terms of the agreement, Societe Generale will pay roughly half of the settlement monies to Fannie Mae and half to Freddie Mac.

In addition, certain claims against Societe Generale related to the securities involved will be released.

This is the eighth settlement the FHFA has announced in relation to the 18 lawsuits it filed against lending institutions in 2011 over the sale of faulty mortgage-backed securities.

The settlement with Paris-based Societe Generale follows Morgan Stanley's agreement earlier this month to pay $1.25 billion to resolve similar claims brought by the FHFA.

As a result of previous settlements with banks including JPMorgan, Deutsche Bank and Citigroup, the FHFA has to date recovered about $8.91 billion.

As per a Reuters report, Societe Generale claims it has the funds in its reserves and that the settlement will have no material impact on its revenue.

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