Nearly $8 Billion in 2013 FHFA MBS Settlements

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MORTGAGE EXPERT
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The regulator of Fannie Mae and Freddie Mac reported that it recovered nearly $8 billion in losses from private-label securities last year. The total could double.

The collections stem from 18 lawsuits filed in 2011 by the Federal Housing Finance Agency, which sought to recover losses from investments by Fannie and Freddie in non-agency mortgage-backed securities.

The FHFA on Thursday identified seven settlements for $7.88 billion it reached last year with financial institutions that were involved in the issuance of private-label MBS.

By far, JPMorgan Chase & Co.’s $4.0 billion settlement was the largest listed by the FHFA.

The next-biggest amount — $1.925 billion — was paid by Deutsche Bank AG.

The following table covers all of the private-label MBS litigation touted by the FHFA.

FHFA Settlements

Date Defendant Amount
(billions)
Oct 29, 2013 Ally Financial Inc. $0.475
May 28, 2013 Citigroup Inc. $0.250
Dec 20, 2013 Deutsche Bank AG $1.925
Jan 23, 2013 General Electric Co. $.006
Oct 25, 2013 JPMorgan Chase & Co. $4.000
Jul 22, 2013 UBS Americas Inc. $0.885
Nov 7, 2013 Wells Fargo Bank, N.A. $0.335

 

Another 12 cases — including actions against Bank of America Corp., Countrywide Financial Corp. and Merrill Lynch & Co. — remain open.

Fitch Ratings has previously estimated BofA’s potential settlement with FHFA at between $5 and $8 billion.

Given a potential BofA settlement and settlements with any of the other remaining 12 defendants, FHFA could possible double its nearly $8 billion total take to date.

Author

Mortgage Daily Staff

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