A settlement on government-insured mortgages at First Horizon National Corp. is similar to another such agreement by a mortgage unit it used to own.
MetLife Bank, N.A., which was merged into MetLife Home Loans in June 2013, agreed in February to a $124 million settlement with the U.S. Department of Justice.
The settlement with the former First Horizon Home Loans unit resolved allegations of violating the False Claims Act on mortgages insured by the Federal Housing Administration.
Now, First Tennessee Bank, the regional bank for First Horizon National Corp., has reached a settlement in principle with the federal government.
A statement Thursday from First Tennessee Bank indicated it has agreed to proposed settlement terms with the
Department of Housing and Urban Development and the Department of Justice.
The settlement resolves claims on First Tennessee’s underwriting and origination on FHA-insured loans from 2006 through 2008 that had a claim by April 2, 2015.
Preliminary terms of the settlement call for a $212.5 million cash payment from First Tennessee.
First Horizon sold much of its mortgage operations to MetLife in 2008.
“This is another major legal resolution as First Tennessee unwinds from the mortgage business the company sold in 2008,” the statement said. “In the past several years First Tennessee has resolved a number of other legal matters related to its former mortgage business, and has sold substantial amounts of nonstrategic mortgage loans and mortgage servicing.”
The disclosure noted that
final legal resolution remains subject to further negotiation, while an execution of a formal written settlement agreement satisfactory to all parties is still required.
