The Federal Housing Finance Agency (FHFA) has reached a settlement with UBS Americas Inc. for $885 million to cover claims of alleged violations of federal and state securities laws in connection with private-label residential mortgage-backed securities purchased by Fannie Mae and Freddie Mac.
Under the terms of the agreement, UBS will pay approximately $415 million to Fannie Mae and $470 million to Freddie Mac to resolve certain claims related to securities sold to the companies between 2004 and 2007.
‘The satisfactory resolution of this matter provides greater clarity and certainty in the marketplace and is in line with our responsibility for preserving and conserving Fannie Mae's and Freddie Mac's assets on behalf of taxpayers,’ said FHFA Acting Director Edward J. DeMarco.
The settlement agreement covers claims between the FHFA and UBS in the following cases: FHFA v. UBS Americas Inc.; FHFA v. Ally Financial Inc.; FHFA v. Countrywide Financial Corp.; and FHFA v. First Horizon National Corp. The settlement is between the FHFA and UBS Americas, Inc., UBS Real Estate Securities Inc., UBS Securities LLC, Mortgage Asset Securitization Transactions Inc. and other named defendants.
In September, UBS asked the U.S. Court of Appeals to overturn a ruling that enabled the FHFA to pursue the lawsuit. The Swiss bank's legal argument hinged on whether the 2008 legislation that established the FHFA also extended the timeline for the government to pursue legal claims. In April, however, the court of appeals rejected UBS' request.
The FHFA has now settled three of the 18 suits it filed in 2011. The agency remains committed to satisfactorily resolving the remaining suits, it said in a release.
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