Citigroup Settles With Fannie Mae for $968 Million
Citigroup has agreed to pay $968 million to Fannie Mae to settle any potentially bad mortgages the bank sold to the government-sponsored mortgage company, Citigroup announced today.
The settlement covers 3.7 million home loans made between 2000 and 2012. Not only will it apply to existing troubled mortgages but also to any future claims on those loans. Most of the settlement money is available under Citigroup's existing mortgage repurchase reserves. The bank said it would rebuild its residential mortgage repurchase reserve to $245 million in the second quarter.
"We have a strong and productive relationship with Fannie Mae," said CitiMortgage CEO Jane Fraser in the company's statement. "This agreement resolves substantially all potential future repurchase claims from them for loan originations from 2000 to 2012."
In a statement, Fannie Mae General Counsel Bradley Lerman said, "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 continue to focus on making strong progress in resolving repurchase requests with other lenders ..."
Last January, Bank of America agreed to pay Fannie Mae $3.6 billion in cash and repurchase $6.75 billion worth of residential mortgages it sold to Fannie Mae from 2000 to 2008.
The article Citigroup Settles With Fannie Mae for $968 Million originally appeared on Fool.com.Fool contributor Dan Radovsky has no position in any stocks mentioned. The Motley Fool recommends Bank of America. The Motley Fool owns shares of Bank of America and Citigroup Inc . Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.