Fifth Third Bancorp (NASDAQ:FITB) is making nice with Freddie Mac. The banking group has agreed to pay the government-controlled agency $25 million in cash to resolve repurchase claims associated with financial crisis-era mortgage loans. The settlement covers mortgages the financial services company originated and sold to Freddie Mac before Jan. 1, 2009, regardless of whether the latter made a repurchase demand on any particular loan.

In the press release announcing the news, Fifth Third said its "mortgage representation and warranty reserves associated with the loans covered by the agreement were fully sufficient to cover the payment amount."

Both Freddie Mac and its sister agency, Fannie Mae, have the power to force lenders to repurchase mortgages that do not conform to certain guidelines. Since the crisis, it has demanded compensation from numerous banks over such loans. Last month, SunTrust Banks agreed to pay more than $200 million in a mortgage settlement with both agencies, and in September Citibank settled with Freddie Mac for $395 million.