A mortgage lender has paid more than $1 million to resolve repurchase liabilities on loans acquired more than two years ago. It’s the third time in the last 10 days that such an agreement has been disclosed.
A $1.45 million cash payment was made on Dec. 29, 2010, by StellarOne Corp. to one of its primary investors.
The agreement resolves repurchase demands and “make-whole” indemnification claims on residential loans acquired by the investor from StellarOne’s wholesale and retail divisions prior to 2009. As a result, all potential repurchase and indemnification claims are resolved on loans acquired before 2009.
The settlement resolves around 80 percent of outstanding investor claims at the Charlottesville, Va.-based firm.
StellarOne said that it had already set aside a significant portion of reserves for the settlement.
“This action mitigates current and future off-balance sheet repurchase and indemnification risk, and is in the best interest of our shareholders,” StellarOne President and Chief Executive Officer O. R Barham Jr. said in the news release. “The preponderance of our indemnification claims have arisen from pre-2009 mortgage production that was sold to this particular investor through one of our legacy companies.”
StellarOne is the third company to recently reveal a settlement on repurchase demands.
On Monday, Bank of America Corp. issued a statement indicating that it reached agreements with Fannie Mae and Freddie Mac to resolve outstanding and potential repurchase claims, costing the company nearly $3 billion.
A week earlier, Ally Financial Inc. disclosed in a Securities and Exchange Commission filing that it reached a $462 million agreement with Fannie Mae to settle its repurchase liabilities on $84 billion in securitizations.
