NEW YORK — Fannie Mae and Freddie Mac became the latest big names to seek a voice in the massive $8.5 billion settlement reached by Bank of America Corp. with investors in mortgage-backed securities with a court filing Tuesday.
The mortgage giants, via their administrator Federal Housing Finance Agency, or FHFA, said in a filing in federal court in Manhattan that they needed more information about the settlement. The government-sponsored enterprises said they need the information in order to "voice a substantive objection to the proposed settlement should a now unforeseen issue arise."
But the agencies also stated specifically in their filing that they found it "positive" that the proposed settlement includes changes to how the mortgages are serviced and has specific terms for servicing troubled mortgages. Fannie and Freddie also said they "were encouraged that a consortium of significant market participants supports the proposed settlement."
The settlement was reached in late June between Bank of America and a major group of investors including BlackRock Inc. and other household institutional investor names. The settlement sought to compensate investors that purchased mortgage-backed securities that eventually soured at high rates. Bank of America faces millions in claims from injured investors.
Since then, however, the settlement has faced harsh questioning by some investors, including the likes of American International Group Inc. (AIG), and by law enforcers like the New York attorney general.
Many others have simply sought for more information in the court, taking more neutral tones like Fannie and Freddie have taken so far.
A group of investors has sought to move the case to federal court, where Fannie and Freddie filed. A federal judge ultimately will rule on where the case will be held and Fannie and Freddie said they don't have a position on that.
"This pleading was filed to obtain any additional pertinent information developed in the matter," a statement from the FHFA said. "The conservator is aware of no basis upon which it would raise a substantive objection to the proposed settlement at this time."
A spokesman for Bank of America declined to comment. The bank has said it believes that the settlement is reasonable and that "there are compelling reasons why the agreement should receive judicial approval."
Tuesday was a deadline for those seeking to intervene in the case, and multiple other pension funds and investors also sought permission. The Federal Home Loan Banks in various cities as well the National Credit Union Association and a host of bond-insurance companies were among those filing as the deadline approached.
Ambac Financial Group Inc., a bond insurer that ultimately filed for bankruptcy partly as a result of its mortgage-bond woes, asked the court in a one-sentence filing to be allowed to intervene.
A judge has to approve each motion before it becomes official.
