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RBS to pay $99.5 mln to settle some FHFA mortgage claims

Published 19/06/2014, 23:06
RBS to pay $99.5 mln to settle some FHFA mortgage claims
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By Jonathan Stempel

(Reuters) - Royal Bank of Scotland Group Plc agreed on Thursday to pay $99.5 million (£58.66 million) to resolve a U.S. regulator's claims against the bank over Freddie Mac's purchase between 2005 and 2007 of mortgage-backed securities that later went sour.

The Federal Housing Finance Agency said the accord related to litigation also naming Ally Financial Inc, which previously settled, as a defendant.

The FHFA said it has now reached 15 settlements, totalling about $16.1 billion, stemming from lawsuits it filed in 2011 to recoup losses on roughly $200 billion of mortgage-backed securities purchased by Freddie Mac and Fannie Mae.

The FHFA oversees both government-controlled mortgage companies as conservator.

It still has a case against RBS in federal court in Connecticut, which it has said concerned about $30.4 billion of securities, and cases in federal court in Manhattan against Goldman Sachs Group Inc, HSBC Holdings Plc and Nomura Holdings Inc.

In a statement, RBS said the settled case concerned more than $2 billion of securities, It said it previously set aside enough money to cover the settlement amount. RBS said that other mortgage securities cases may be resolved differently.

Bank of America Corp and its Countrywide and Merrill Lynch units have reached three of the 15 FHFA settlements. Those three settlements total $5.83 billion, a larger amount than at any other bank.

© Reuters. A logo at a Royal Bank of Scotland branch is seen in the City of London

The FHFA became the conservator for Freddie Mac and Fannie Mae after federal regulators seized those companies in September 2008.

The case is FHFA v. Ally Financial Inc et al, U.S. District Court, Southern District of New York, No. 11-07010.

(Reporting by Jonathan Stempel in New York; Editing by Marguerita Choy and Leslie Adler)

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