Banks Return $8 Billion to Taxpayers in 2013 Through Mortgage-Related Settlements

Following lawsuits, seven financial institutions settled with the Federal Housing Finance Agency in 2013 to the tune of $8 billion, including Citigroup and General Electric, whose amounts were not previously disclosed.

Jan 2, 2014 at 2:02PM

The Federal Housing Finance Agency (FHFA) announced today that in 2013 it recovered more than $8 billion through settlements surrounding private-label mortgage-backed securities (PLS) sold to Fannie Mae (NASDAQOTCBB:FNMA) and Freddie Mac (NASDAQOTCBB:FMCC) by banks and other financial institutions during the financial crisis.

A PLS is a mortgage bond that is not issued by Fannie Mae or Freddie Mac, but instead a financial institution or other non-government enterprise. The FHFA, which controls Fannie and Freddie, sued the banks because it alleged they misrepresented the underlying quality of the mortgages that made up the bonds that were sold to Fannie and Freddie.

Today's press release highlighted the six PLS settlements that were reached in 2013. This included a $250 million settlement with Citigroup (NYSE:C) and a $6.25 million settlement with General Electric (NYSE:GE). Both of those settlements were previously announced, but the amounts were not disclosed.

In total, there were six firms that settled with the FHFA over the PLS litigation in 2013. In addition to Citigroup and General Electric there was also:


Settlement Amount

JPMorgan Chase

$4 billion

Deutsche Bank

$1.925 billion


$885 million

Ally Financial

$475 million

In addition, Wells Fargo (NYSE:WFC) settled for $335 million although it was not part of the original group of 17 financial institutions that the FHFA announced it would be suing in 2011 to recover the losses at Fannie and Freddie. 

There are still 12 financial institutions that have not settled with the FHFA for PLS litigation, including Bank of America, Goldman Sachs, Barclays, and others.


Fool contributor Patrick Morris owns shares of Bank of America and General Electric Company. The Motley Fool recommends Bank of America, Goldman Sachs, and Wells Fargo. The Motley Fool owns shares of Bank of America, Citigroup, General Electric Company, JPMorgan Chase, and Wells Fargo. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

A Financial Plan on an Index Card

Keeping it simple.

Aug 7, 2015 at 11:26AM

Two years ago, University of Chicago professor Harold Pollack wrote his entire financial plan on an index card.

It blew up. People loved the idea. Financial advice is often intentionally complicated. Obscurity lets advisors charge higher fees. But the most important parts are painfully simple. Here's how Pollack put it:

The card came out of chat I had regarding what I view as the financial industry's basic dilemma: The best investment advice fits on an index card. A commenter asked for the actual index card. Although I was originally speaking in metaphor, I grabbed a pen and one of my daughter's note cards, scribbled this out in maybe three minutes, snapped a picture with my iPhone, and the rest was history.

More advisors and investors caught onto the idea and started writing their own financial plans on a single index card.

I love the exercise, because it makes you think about what's important and forces you to be succinct.

So, here's my index-card financial plan:


Everything else is details. 

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