First Horizon Agrees to $212M Mortgage Settlement
First Horizon has agreed to pay $212.5 million to settle claims tied to the Memphis, Tenn., company's past underwriting and origination of certain loans.
The $25.7 billion-asset company said in a press release Thursday that it had reached a settlement with the Department of Housing and Urban Development and the Department of Justice tied to a key outstanding matter tied to a mortgage business it sold in 2008. The settlement is related to FHA-insured loans that the company originated in 2006, 2007 and 2008.
First Horizon, which had already reserved $50 million for the matter, said it expects to report a pretax expense of $162.5 million in its first-quarter results.
First Horizon built a big national mortgage platform prior to the financial crisis, which it sold in 2008 to MetLife.
The company last year reached an agreement with Freddie Mac related to home loans originated and sold to the government-sponsored entity between 2000 and 2008. It also agreed to pay $110 million to the Federal Housing Finance Agency to settle allegations it sold faulty mortgages to Fannie Mae and Freddie Mac in the years leading up to housing bust.