Three lenders pay $1.3 billion to settle mortgage claims
According to the Washington Post, three of America’s largest banks - Wells Fargo (WFC), Citigroup (C) and Suntrust Banks (STI) – agreed to pay a total of $1.3 billion to resolve claims on millions of home loans that have soured or remain at risk. The paper elaborates on the settlements:
“With these settlements, Freddie Mac is recouping funds effectively due to the nation’s taxpayers,” Donald H. Layton, chief executive of Freddie Mac, said in a statement. “We believe these settlements are equitable, and we are pleased to have resolved legacy repurchase issues with three of our valued customers.”
Wells Fargo, Citigroup and SunTrust are among many lenders that sell home loans to Freddie Mac and Fannie Mae, which bundle them into mortgage-backed securities and cover the losses if a homeowner defaults.