The Goldman Sachs Group Inc. has agreed to repurchase more than $3 billion in residential mortgage-backed securities it sold to Fannie Mae and Freddie Mac.
The Wall Street giant said the agreement resolves claims on private-label RMBS that it sold to Fannie and Freddie from 2005 until 2007.
The deal was made with the Federal Housing Finance Agency, which has acted as conservator for the pair of secondary lenders since 2008.
Goldman is paying $3.153 billion to repurchase the RMBS.
The settlement agreements indicated that $2.154 billion is going to McLean, Va.-based Freddie and $0.999 billion will be paid to Washington-based Fannie.
“This settlement, worth approximately $1.2 billion, effectively makes Fannie Mae and Freddie Mac whole on their investments in the securities at issue,” the FHFA stated.
In addition to settling claims made in FHFA v. Goldman Sachs & Co., et al., the settlement resolves claims involving Goldman in FHFA v. Ally Financial Inc., et al.
Reserves were set aside as of the second-quarter 2014 to substantially cover the agreement, according to Goldman.
“We are pleased to have resolved these matters,” The Goldman Sachs Group Inc. Executive Vice President and General Counsel Gregory K. Palm said in the company’s statement.
It’s the 16th private-label securities lawsuit to be settled by FHFA of the 18 it filed in 2011.
Mortgage Daily has tracked $23.1 billion in settlement proceeds from FHFA’s private-label securities settlements.
