Citigroup Inc. (C), the third-largest U.S. bank, agreed to pay Freddie Mac $395 million to resolve potential future repurchase claims tied to mortgages.
The accord covers about 3.7 million loans sold to Freddie Mac between 2000 and 2012, New York-based Citigroup said today in a Business Wire statement. The $395 million sum was covered by repurchase reserves as of June 30, Citigroup said.
The biggest U.S. home lenders, including Bank of America Corp. and Citigroup faced pressure to resolve claims on mortgages sold to Fannie Mae and Freddie Mac, the U.S. owned firms that took a $187.5 billion bailout. Citigroup announced a deal in July to pay Fannie Mae $968 million.
The deal with Freddie Mac is "another important milestone in successfully resolving Citi's remaining legacy mortgage issues," Jane Fraser, chief executive officer of CitiMortgage, said in the statement.
The deal doesn't release the bank from liability tied to servicing the loans. It excludes less than 1,000 loans from the period, and Citigroup said it believes it is adequately reserved for those.
