Agreement covers loans originated between 2000 and 2012
Citigroup today announced an agreement with Freddie Mac to resolve potential future repurchase claims for breaches of representations and warranties on 3.7 million loans sold to Freddie Mac between 2000 and 2012 (“Included Loans”). Citi agreed to pay Freddie Mac $395 million under the agreement, all of which was covered by Citi’s existing mortgage repurchase reserves as of June 30, 2013.
Jane Fraser, CEO of CitiMortgage, said, “Today’s agreement with Freddie Mac marks another important milestone in successfully resolving Citi’s remaining legacy mortgage issues. Looking forward, Citi remains focused on continuing to provide high quality mortgage products and service to our customers.”
Citi’s agreement with Freddie Mac covers potential future origination-related representation and warranty claims on the Included Loans. It does not release Citi’s liability with respect to its servicing or other ongoing contractual obligations on the Included Loans. It also does not release liability to a population of fewer than 1,000 loans originated between 2000 and 2012 with certain characteristics such as loans sold with recourse or some guarantee of performance and loans currently in the repurchase process. Citi currently believes it is adequately reserved for the loans not covered by the agreement. Citi has and will continue to work with Freddie Mac on the timely repurchase of any mortgage loans sold to Freddie Mac that do not meet Freddie Mac’s requirements.