Barclays Reaches $280 Million Settlement Over Loans Sold to GSEs

Barclays Plc (BARC) will pay $280 million to resolve Federal Housing Finance Agency claims that the London-based bank violated U.S. securities laws in connection with private-label mortgage-backed securities sold to Fannie Mae (FNMA) and Freddie Mac.

The agreement announced by the FHFA in a statement today, calls for Barclays to pay $227 million to Freddie Mac and $53 million to Fannie Mae for loans sold from 2005 to 2007. The settlement is the 13th related to the 18 lawsuits FHFA filed in 2011.

The FHFA, which placed Fannie Mae and Freddie Mac into conservatorship in 2008, sued Barclays and more than a dozen other banks, including JPMorgan Chase & Co. and Goldman Sachs Group Inc., over mortgage securities sold to the mortgage-finance firms.

The agency claimed that loans backing securities sold to Fannie Mae and Freddie Mac were riskier than promised, leading to losses.

Brandon Ashcraft, a spokesman for Barclays, said the settlement won’t affect the bank’s earnings this year.

To contact the reporter on this story: Gregory Mott in Washington at gmott1@bloomberg.net

To contact the editors responsible for this story: Gregory Mott at gmott1@bloomberg.net; Maura Reynolds at mreynolds34@bloomberg.net Anthony Gnoffo

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