MCLEAN, VA -- The Federal Home Loan Mortgage Corp., commonly known as Freddie Mac (OTCQB: FMCC), on Friday announced an agreement with JPMorgan Chase & Co. 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 to settle litigation concerning investments by Freddie Mac and Fannie Mae in residential nonagency mortgage-related securities.
Freddie Mac will be paid approximately $3.2 billion under the two agreements, according to a news release.
"These settlements represent solid progress in our continuing efforts to resolve legacy issues and recoup funds that are due to America's taxpayers," said Freddie Mac CEO Donald H. Layton. "We believe these are equitable resolutions, and we are pleased to have concluded these matters with one of our valued customers."
Details of the agreements
Freddie Mac, Fannie Mae and FHFA entered into an agreement with JPMorgan, certain affiliated entities and other persons on Oct. 25 to settle litigation previously initiated by FHFA against JPMorgan relating to investments by Freddie Mac and Fannie Mae in residential nonagency mortgage-related securities largely originated, issued or underwritten by JPMorgan.
JPMorgan will make a total payment of $4 billion under the settlement, of which approximately $2.74 billion is expected to be paid to Freddie Mac.
Also on Oct. 25, Freddie Mac entered into an agreement with JPMorgan Chase Bank, National Association ("Chase") under which Freddie Mac will release Chase from loan repurchase obligations relating to about 1.8 million loans bought by Freddie Mac between 2000 and 2008. In exchange, Chase agreed to pay Freddie Mac a total of $480 million, less credits of up to $60 million for repurchases already made and for reconciling adjustments.
The agreement was approved by FHFA, as Freddie Mac's conservator.
Freddie Mac contributed.
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