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PNC to Pay $89M in Penalties to Freddie Mac
PITTSBURGH -- PNC Bank, a subsidiary of PNC Financial Services Group Inc., has reached an agreement in principle with the Federal Home Loan Mortgage Corp. to resolve substantially all indemnification and repurchase obligations related to loans its sold the agency between 2000 and 2008. PNC will pay Freddie Mac $89 million (less credits of $8 million).
The payment “will resolve certain existing and future repurchase obligations related to approximately 900,000 loans originated and sold to Freddie Mac primarily between 2000 and 2008 and to compensate Freddie Mac for certain past losses and potential future losses relating to denials, rescissions and cancellations of mortgage insurance,” officials said.
The agreement follows the previously announced agreement in principle that PNC reached with the Federal National Mortgage Association (Fannie Mae) to resolve repurchase demands with respect to loans sold between 2000 and 2008.
Completion of these settlement agreements will resolve substantially all of PNC Bank's outstanding and potential indemnification and repurchase obligations related to loans sold to Freddie Mac and Fannie Mae from 2000 through 2008,PNC officials said, subject to certain exceptions which PNC does not believe are material. The agreements remain subject to final documentation and approvals by Freddie Mac and Fannie Mae's regulator. The amount of the settlements with Freddie Mac and Fannie Mae had been fully accrued by PNC Bank as of Sept. 30.
Published by The Business Journal, Youngstown, Ohio.
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