Citigroup to pay Fannie Mae $968 million

July 1, 2013 at 2:24 PM
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WASHINGTON, July 1 (UPI) -- Citigroup said Monday it would pay the Federal National Mortgage Association $968 million to resolve claims concerning 3.7 million mortgages.

The Washington Post reported Monday that the deal with Fannie Mae covers mortgages written from 2000 to 2012.

The deal resolves concerns that Citigroup was writing substandard quality loans during the period in question.

Fannie Mae purchases bundled loans from banks such as Citigroup to present them with a quick profit that allows the banks to continue to write additional loans.

But as of the first quarter of 2013, repurchase requests from Fannie Mae had built up to $887 million in outstanding requests involving Citigroup loans.

"We have a strong and productive relationship with Fannie Mae. As we work to deepen and enhance financial relationships with our clients, we will continue to focus on the production of high-quality mortgage loans," said CitiMortgage Chief Executive Officer Jane Fraser in a statement.

Bank of America reached a $10.3 billion deal with Fannie Mae in January that included an agreement to buy back 30,000 loans that originated at Countrywide Financial from 2000 to 2008.

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