UBS to pay $885M to settle lawsuit with U.S. housing agency

July 26, 2013 at 1:34 AM
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WASHINGTON, July 26 (UPI) -- Swiss bank UBS has agreed to pay $885 million to settle a lawsuit over mortgages sold to the U.S. government-sponsored Fannie Mae and Freddie Mac.

Under the settlement, UBS, which operates in 50 countries and is the largest bank in Switzerland, will not have to admit any wrongdoing, The Wall Street Journal reported. The Federal Housing Finance Agency charged in its 2011 suit UBS provided false information about the risk of mortgage-backed securities it sold to Fannie and Freddie.

"The satisfactory resolution of this matter provides greater clarity and certainty in the marketplace and is in line with our responsibility for preserving and conserving Fannie Mae's and Freddie Mac's assets on behalf of taxpayers," Edward DeMarco, acting head of the FHFA, said Thursday.

The agency sued 17 banks in 2011 and has now settled with three. The UBS settlement was the first in which the amount to be paid was released.

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