Another mortgage banking firm has decided to settle outstanding repurchase demands with the Federal Home Loan Mortgage Corp.
The latest agreement was reached with SunTrust Banks Inc., according to separate announcements from the Atlanta-based firm and Freddie Mac.
The settlement resolves repurchase liability on around 312,000 residential loans that SunTrust sold to Freddie between 2000 and 2008.
The deal, reached on Sept. 30, means that SunTrust will be released from existing and future loan repurchase obligations for certain breaches of loan-level selling representations and warranties.
SunTrust will pay $65 million to McLean, Va.-based Freddie. The amount includes compensation for certain outstanding and potential future losses relating to denials, rescissions and cancellations of mortgage insurance.
After adjusting for $25 million in credits related to certain prior repurchases, a cash payment of $40 million was made.
SunTrust said it expects to incur around $15 million in mortgage provision expense during the third quarter to cover the settlement.
Freddie also reached an $869 settlement with Wells Fargo &Â Co. on Sept. 27 and agreed to a $395 million settlement with Citigroup Inc. last month.
“Under all three agreements, Freddie Mac will, subject to specified limitations and exclusions, release the firms from certain existing and future loan repurchase obligations relating to specific populations of single-family loans and certain other obligations,” Freddie said. “The payments to Freddie Mac also compensate Freddie Mac for certain past losses and potential future losses relating to denials, rescissions and cancellations of mortgage insurance.”
