PNC Financial Services Group’s and Freddie Macannounced that they reached an agreement in principle to resolve substantially all indemnification and repurchase obligations related to loans sold to Freddie Mac between 2000 and 2008.
According to the agreement, PNC Bank will pay Freddie Mac a total of $89 million—minus a credit of $8 million—to resolve certain existing and future repurchase obligations related to approximately 900,000 loans originated and sold to Freddie Mac primarily between 2000 and 2008. The intention of the decisions is to compensate Freddie Mac for certain past losses and potential future losses relating to denials, rescissions, and cancellations of mortgage insurance.
This agreement follows the previously announced agreement in principle that PNC reached with Fannie Mae to resolve repurchase demands with respect to loans sold between 2000 and 2008.
Now that these settlement agreements are underway PNCBank has resolved a large portion of the bank’s outstanding and potential indemnification and repurchase obligations related to loans sold to the GSEs from 2000 through 2008. The agreements still have to gain final approval fromFHFA. The amount of the settlements with Freddie Mac and Fannie Mae had been fully accrued by PNC Bank as of September 30, 2013.