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Citi paying $395M to Freddie for mortgage claims

[September 26, 2013]  WASHINGTON (AP) -- Citigroup Inc. has agreed to pay $395 million to Freddie Mac to settle claims on home loans it sold to the government-controlled mortgage finance company.

The agreement announced Wednesday involves 3.7 million mortgages sold between 2000 and 2012. Freddie and its bigger sibling Fannie Mae pressed Citigroup and other big banks to take back mortgages they sold, which soured in the housing bust. In July, Citigroup agreed to pay $968 million to settle similar claims from Fannie.

Bank of America paid $2.6 billion in 2011 to settle claims on home loans sold to Fannie and Freddie.

Citigroup says the agreement marks an important milestone in resolving its mortgage issues stemming from the 2008 financial crisis.

A Freddie spokesman says it is fair and allows both companies to move forward.

[Associated Press]

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