U.S. Bancorp Settles With Freddie Mac For $53 Million

Posted by Patrick Barnard on December 11, 2013 No Comments
Categories : Residential Mortgage

U.S. Bancorp has entered into an agreement with government-sponsored enterprise Freddie Mac that resolves substantially all repurchase obligations related to representations and warranties made on loans sold to Freddie Mac between 2000 and 2008.

After adjusting for credits related to prior repurchases, U.S. Bancorp will make a one-time $53 million cash payment to Freddie Mac, as per a press release. U.S. Bancorp reports that it will settle the matter using cash in its reserves.

Freddie Mac and its larger sibling, Fannie Mae, can force banks to buy back mortgages that don't meet their underwriting standards.

Earlier this month, Freddie Mac announced it had entered into a settlement agreement with Bank of America to resolve claims related to representations and warranties on single-family loans sold to Freddie Mac from 2000 to 2009. Under terms of the agreement, Bank of America agreed to pay Freddie Mac a total of $404 million – less credits of $13 million for repurchases already made and for reconciling adjustments.

Numerous other banks, including Fifth Third Bancorp, SunTrust Banks Inc., Citigroup Inc.and PNC Financial Services Group Inc. have reached similar settlements with Freddie Mac, Fannie Mae or both companies in recent months.

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