General Electric Settles Mortgage Lawsuit with FHFA
Lawsuits by the Federal Housing Finance Agency that charge Bank of America (BAC), Citigroup (NYSE: C), HSBC and Credit Suisse (CS) with wrongdoing in the sale of securities backed by residential mortgages may advance, a federal judge in Manhattan ruled Wednesday.November 29
A series of lawsuits that charge some of the nation's biggest banks with misleading investors in connection with the sale of hundreds of billions of dollars of mortgage-backed securities may come down to a question of timing.November 26
General Electric (GE) has agreed to settle a lawsuit charging it with wrongdoing in the sale of securities backed by residential mortgages.
The lawsuit is one of 18 filed by the Federal Housing Finance Agency against some of the nation's biggest sponsors of mortgage-backed securities during the run-up to the housing crisis. It charged GE with misleading Freddie Mac into buying $549 million in securities over a roughly three-month period starting in September 2005.
Denise Cote, a U.S. District Judge for the Southern District of New York who is presiding over 16 of the suits, on Wednesday granted an FHFA request to dismiss the agency's complaint against GE.
Financial terms of the settlement, which was first reported by Reuters, were not disclosed.
The settlement "resolves the dispute between FHFA and GE," FHFA general counsel Alfred Pollard said in a written statement.
GE declined comment through a spokesman.
In its lawsuit, FHFA charged GE's former mortgage lending unit with presenting a false picture of the riskiness of residential mortgages behind securities that were sold to Freddie Mac.
Cote has issued a protocol to govern discovery in the cases that remain, but the litigation may hinge on the outcome of an appeal by UBS, which has asked the U.S. Court of Appeals for the 2nd Circuit to dismiss the lawsuits because FHFA allegedly waited too long to file them.