PNC Settles With Freddie Mac Over Mortgage Claims
PNCannounced today that it has reached an $89 million settlement with Freddie Mac related to mortgage claims for loans originated and sold to Freddie Mac between 2000 and 2008.
The settlement resolves certain PNC repurchase obligations for both existing and future claims for approximately 900,000 loans that were sold to Freddie, which is responsible for helping provide liquidity in the mortgage market by buying loans from banks and other financial institutions. The $89 million will also be used to compensate Freddie Mac for any losses that the government-sponsored entity incurred in the past or any other losses that may result in the future.
The settlement "will resolve substantially all of PNC Bank's outstanding and potential indemnification and repurchase obligations," and PNC does not believe there will be any other material claims related to the mortgages it sold to Freddie Mac or Fannie Mae.
This also follows news from earlier in the week that Bank of America had reached a roughly $400 million settlement with Freddie Mac related to its own dealings surrounding mortgage repurchase obligations.
PNC did note in the release that at the end of the third quarter it had already appropriately reserved enough money to cover the amount of the settlements.
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