Late last month, Citigroup agreed to settle a lawsuit by the Federal Housing Finance Agency that accused the nation’s third-largest bank of misleading investors and peddling more than $3.5 billion in securities backed by defective residential mortgages to Fannie Mae and Freddie Mac over a 20-month period starting in September 2005.
Financial terms of the settlement were not disclosed.
The FHFA, in its role as conservator for Fannie Mae and Freddie Mac, sued Citigroup and 17 other financial institutions in 2011. The FHFA charged Citigroup with misstating facts about the quality of the underlying mortgage loans and the practices used to originate them.
Meanwhile, the FHFA remains active in settlement discussions with other banks that are subjects of similar lawsuits.