GE Settles FHFA Suit Over Freddie Mac Mortgage Bonds
FHFA, which oversees Fannie Mae and Freddie Mac, sued GE and underwriters Morgan Stanley (MS) and Credit Suisse Group AG (CS), saying mortgage loans backing about $550 million in securities didn’t live up to their promised quality.
“This settlement resolves the dispute between FHFA and GE consistent with FHFA’s responsibilities as conservator of Freddie Mac,” Alfred M. Pollard, FHFA’s general counsel, said in a statement. “FHFA is pleased this lawsuit has been resolved and appreciates the work of Freddie Mac in this matter.”
Pollard didn’t disclose the terms of the settlement. A spokesman for Fairfield, Connecticut-based GE couldn’t be reached for comment.
The case against GE is among a group of lawsuits FHFA filed against banks over mortgage securities sold to Fannie Mae and Freddie Mac.
The agency said in a court filing yesterday that it was dropping claims against GE, Morgan Stanley and Credit Suisse.
The case is Federal Housing Finance Agency v. General Electric Co., 11-7048, U.S. District Court, Southern District of New York (Manhattan).
To contact the editor responsible for this story: John Pickering at firstname.lastname@example.org