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:

Firm

Settlement Amount

JPMorgan Chase

$4 billion

Deutsche Bank

$1.925 billion

UBS

$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.

link

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.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at www.fool.com/podcasts.

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to www.fool.com/podcasts, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.

 


Compare Brokers