Freddie's Dealers Agree to Fines
WASHINGTON -- The Federal Home Loan Mortgage Corp. said Monday that members of its securities-selling group who violated procedures had agreed to comply with penalties assessed last week.
The agency, known as Freddie Mac, ordered sanctions against at least 18 of the 25 banks and brokers authorized to sell its debt. The dealers had until 9 a.m. Monday to reply to charges that they inflated customer orders and falsified records.
"It pleases me to have this action behind us," said Leland Brendsel, chairman and chief operating officer of the government-sponsored mortgage agency. "Freddie Mac and our dealers now can move ahead."
The dealers' action "cleans the slate with Freddie Mac and shows their commitment to restoring and maintaining the highest standards in the marketplace," Mr. Brendsel said.
Freddie Mac said Thursday that each offending dealer would be put on probation for one year and be required to pay the agency a penalty equal to 20% of its commissions from 1990 and 1991 Freddie Mac debenture sales.
Some members of the dealers group reportedly hesitated to respond to the charges because they did not want to be seen as admitting guilt.
Freddie Mac officials stressed that they viewed the matter as a question of dealers' complying with their contractual agreement with the agency, not as a question of admitting guilt.