The Federal Housing Finance Agency (FHFA), conservator of government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac, reports that it recovered nearly $8 billion on behalf of taxpayers in 2013 through settlements with financial institutions that sold ‘faulty’ mortgages to the companies between 2005 and 2007.
The FHFA sued 18 financial institutions in 2011 alleging securities law violations, and in some cases, fraud. So far, it has reached settlements with six of those institutions.
Institutions which the FHFA has filed complaints against include the following:
1. Ally Financial Inc. f/k/a GMAC
2. Bank of America Corp.
3. Barclays Bank PLC
4. Citigroup Inc.
5. Countrywide Financial Corp.
6. Credit Suisse Holdings (USA) Inc.
7. Deutsche Bank AG
8. First Horizon National Corp.
9. General Electric Co.
10. Goldman Sachs & Co.
11. HSBC North America Holdings Inc.
12. JPMorgan Chase & Co.
13. Merrill Lynch & Co./First Franklin Financial Corp.
14. Morgan Stanley
15. Nomura Holding America Inc.
16. The Royal Bank of Scotland Group PLC
17. Société Générale
The series of lawsuits kicked off in 2011 when the FHFA sued UBS Americas Inc. in connection with $4.5 billion in faulty mortgages. The lawsuit was settled for $885 million.
Earlier this week, Fannie Mae announced that it had reached a settlement agreement with Wells Fargo in which the bank would pay $591 million to resolve repurchase requests on certain loans originated prior to 2009.
Timothy J. Mayopoulos, president and CEO of Fannie Mae, says the settlement marks the end of Fannie Mae's legacy repurchase reviews related to faulty mortgages purchased in the run-up to the financial crisis.
The FHFA, however, did not sue Wells Fargo – rather, the bank reached settlement with the agency and GSEs in order to avoid legal proceedings.
As per comments made by various inudstry analysts, the remaining complaints are expected to be settled later this year.