[Updated Dec. 28 with comment from Fannie Mae] Ally Financial’s mortgage unit, Residential Capital, and certain ResCap subsidiaries reached a $462 million settlement with Fannie Mae on potential mortgage repurchases. The agreement covers loans serviced by ResCap subsidiary GMAC Mortgage on behalf of Fannie Mae prior to June 30 and all mortgaged-backed securities that Fannie Mae purchased at various times prior to the settlement, including private-label securities, Ally said Monday. The settlement releases ResCap and its subsidiaries from about $292 billion in potential repurchases, Ally said. "At the start of 2010, we set a goal to substantially reduce risk in our mortgage operation and, during the last 12 months, we have successfully completed a series of steps toward that objective and are largely complete," said Ally CEO Michael A. Carpenter. "This agreement, along with prior repurchase settlements with Freddie Mac and others and the sale of legacy assets and operations, has significantly reduced Ally's risk related to the legacy mortgage business going forward," he said in a press statement. ResCap CEO Thomas Marano said the firm will “focus predominantly on the origination and servicing of conforming mortgages” going forward. ResCap's subsidiary, GMAC Mortgage, originates and services residential mortgages under the GMAC Mortgage and ditech brand names. Ally said the settlement “was modestly in excess of reserves previously taken.” Fannie, said it felt good about the deal. "We are pleased to have reached an agreement with Ally Financial Inc. and related entities which addresses our exposure on a portfolio of loans sold to Fannie Mae by GMAC Mortgage or serviced by GMAC Mortgage," Fannie said in a media statement.  "The agreement also addresses Fannie Mae's potential claims for losses on certain private label securities issued by GMAC entities." In addition to the settlement, ResCap and Fannie Mae made an arrangement on ResCap's payment of mortgage insurance proceeds where mortgage insurance coverage is rescinded or canceled. ResCap said it does not expect this exposure to be material.  The agreement does not extend to other contractual obligations with Fannie Mae such as those that may arise in connection with the servicing of mortgages. The settlement covers ResCap and its subsidiaries but excludes Ally Bank, Ally's retail banking operation. The company does not expect significant repurchase claims on the loans at Ally Bank. Write to Kerry Curry. The author holds no relevant investments.