The past weeks, banks and mortgage service providers have come up with billions of mortgage settlements. General Electric Corporation didn’t even manage to escape this settlement. They have agreed in settling a federal agency lawsuit in a charge accusing them of misleading Freddie Mac into purchasing $549 million mortgage-backed securities.
As we can all remember, there was a federal takeover of Fannie Mae and Freddie Mac as one of the results that took place during the housing crisis last 2008. The Federal National Mortgage Association (Fannie Mae) and Federal Home Loan Mortgage (Freddie Mac) was placed under the conservator-ship of Federal Housing Finance Agency (FHFA).
As the two GSE is placed in their conservator-ship, FHFA have took some steps and filed a lot of cases for the companies responsible for the millions of soured mortgages and millions of people who have lost their homes during the breakdown of the housing industry.
Finally, the Federal Housing Finance Agency have gained results for the first time since they have filed a series of lawsuit against Wall Street banks last 2011.
However, whatever the terms and conditions behind the settlement was not divulged.
The settlement have settled the dispute going on between FHFA and General Electronic Co as the Federal housing Finance Agency have insisted on performing and doing their job as a conservator for both Freddie and Fannie. The agency is very pleased with this settlement as a resolution for the lawsuit and is very happy with the cooperation of Freddie Mac for the matter.
The lawsuits filed by FHFA don’t just involve GE but also 17 other financial institutions that were responsible for more than $200 billion mortgage-backed securities for Fannie Mae and Freddie Mac.
These lawsuits are among the many cases that were filed last 2008 during the financial crisis by regulators, investors and insurers against banks and mortgage service providers accusing them of misrepresenting the loans.
This another similar case for GE as FHFA have accused them of making wrong statements in the offering materials for two mortgaged-backed securities that they sold to Freddie Mac last 2005.
This single case may have been resolved but a lot more is sure to come.