Fannie Mae and Freddie Mac to Receive Settlements Totaling More Than $5 Billion From JPMorgan Chase

Source: Fannie MaeFreddie Mac, FHFA, ABC

Freddie Mac Announces Settlements Totaling Approximately $3.2 Billion With JPMorgan Chase

MCLEAN, VA--(Marketwired - Oct 25, 2013) - Freddie Mac (OTCQB: FMCC) today announced it has entered into an agreement with JPMorgan Chase concerning Freddie Mac's claims related to representations and warranties on single-family loans sold to Freddie Mac. Separately, Freddie Mac, Fannie Mae and FHFA also entered into an agreement with JPMorgan Chase to settle litigation concerning investments by Freddie Mac and Fannie Mae in residential non-agency mortgage-related securities. 

In total, Freddie Mac will be paid approximately $3.2 billion under the two agreements.

Fannie Mae Reaches Repurchase Agreement with J.P. Morgan Chase & Co.

In addition to its agreement with J.P. Morgan Chase, Fannie Mae has reached resolutions this year with a number of lenders on repurchase issues and other matters, including:

  • A $10.3 billion agreement announced in January 2013 with Bank of America including resolution of repurchase issues on certain loans, transfer of servicing rights on 941,000 loans, and repurchase of 30,000 loans by Bank of America. Additionally, the agreement included a $1.3 billion compensatory fee payment for servicing obligations.
  • A $968 million agreement announced in July 2013 with Citigroup to resolve repurchase issues on certain loans
  • A $373 million agreement announced in October 2013 with SunTrust to resolve repurchase issues on certain loans

Fannie Mae disclosed in its most recent 10-Q filing that as of June 30, 2013, it had completed reviews on 89% of the loans delivered from 2005-2008 for defects that would trigger potential repurchase requests and that the company expects to complete those reviews by the end of 2013.

FHFA Announces $5.1 Billion in Settlements with J.P. Morgan Chase & Co.

Settlements include private-label securities and representation and warranty claims Washington, DC –

The Federal Housing Finance Agency (FHFA), as conservator of Fannie Mae and Freddie Mac, today announced it has reached a settlement with J.P. Morgan Chase & Co. and related companies for $ 4 billion to address claims of alleged violations of federal and state securities laws in connection with private-label, residential mortgage-backed securities (PLS) purchased by Fannie Mae and Freddie Mac. Under the terms of the agreement, J.P. Morgan Chase & Co. will pay approximately $2.74 billion to Freddie Mac and $1.26 billion to Fannie Mae to resolve certain claims related to securities sold to the companies between 2005 and 2007 by J.P. Morgan Chase & Co., Bear Stearns & Co., Inc. and Washington Mutual.

JPMorgan's $5B Settlement Doesn't End Its Troubles

WASHINGTON October 26, 2013 (AP)

The $5.1 billion that JPMorgan Chase has agreed to pay hardly ends its legal troubles over mortgage securities it sold . . .

. . . Between 2005 and 2007, JPMorgan sold $33 billion in mortgage securities to Fannie and Freddie, according to their regulator. That was the second-most sold to Fannie and Freddie ahead of the crisis, behind only Bank of America. The securities soured after the housing bubble burst in 2007, losing billions in value . . .

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