According to a release from Citi, the bank will pay Freddie Mac $395 million, all of which is covered by its existing mortgage repurchase reserves as of the end of Q2.
The agreement covers claims for breaches of representations and warranties on 3.7 million loans sold
between 2000 and 2012. It does not release Citi from liability with respect to the bank’s servicing or other obligations on the included loans. Also not included are less than 1,000 loans sold with resource or some guarantee of performance and those currently in the repurchase process.
Citi says it is “adequately reserved” for those loans not covered by the agreement.
Jane Fraser, CEO of CitiMortgage, said the agreement “marks another important milestone in successfully resolving Citi’s remaining legacy mortgage issues.” She added that the bank will remain focused on “continuing to provide high quality mortgage products and service to [its] customers.”
The agreement is the latest in Citi’s efforts to clear up legal issues stemming from the housing collapse. The bank settled with Fannie Mae in July over similar claims and is one of a few banks that have reached an agreement with the Federal Housing Finance Agency over allegations of misrepresented loans sold to both GSEs.