WASHINGTON (4/29/14)--Barclays Capital agreed to pay the Federal Housing Finance Agency $280 million to settle allegations it sold faulty mortgage bonds to Fannie Mae and Freddie Mac. The bonds were among those that helped create the financial crisis in 2008.
Under reported terms of the deal, Barclays will pay $227 million to Freddie Mac and $53 million to Fannie Mae. The settlement resolves a suit that was brought against the bank and three of its executives in addition to claims brought in another suit against Ally Financial. The suit against Barclays covered approximately $4.9 billion in mortgage-backed securities sold by the bank to the government-sponsored enterpreises.
Late last month, the FHFA announced similar settlements in cases involving Bank of America, Countrywide Financial, Merrill Lynch and others. Those settlements provide for an aggregate payment of around $9.33 billion by Bank of America.
The agency has now settled 13 of the 18 securities suits it brought against large banks in 2011. The FHFA has said it remains committed to satisfactory resolution of pending lawsuits.
The National Credit Union Administration has taken its own actions against Wall Street firms. In November, JP Morgan agreed to pay the NCUA $1.4 billion in a settlement over mortgage-backed securities issued, underwrote and sold to now-defunct corporate credit unions in 2006 and 2007. The wholesale lenders collapsed in 2009 due, in part, to the faulty instruments.