WASHINGTON (7/2/13)--Citigroup has agreed to pay Fannie Mae $968 million to resolve mortgage origination issues, the bank announced on Monday.
In a press release, Citigroup said the payment relates to potential future repurchase claims for breaches of representations and warranties on 3.7 million residential first mortgage loans sold to the government-sponsored enterprise.
The agreement covers loans originated between 2000 and 2012 that were later sold to Fannie Mae.
Citi's agreement with Fannie Mae covers potential future origination-related representation and warranty claims on the covered loans.
Citi noted the agreement does not release its liability with respect to its servicing or other ongoing contractual obligations on the covered loans. Loans sold with a performance guaranty or under special credit enhancement programs are also not covered under the agreement, Citigroup added.
Citi has and will continue to work with Fannie Mae on the timely repurchase of any mortgage loans sold to Fannie Mae that do not meet Fannie Mae's requirements.
Fannie Mae Executive Vice President and General Counsel Bradley Lerman said the agreement "resolves legacy repurchase issues, compensates taxpayers for losses" and allows the two firms to move forward and strengthen their business relationship.
Fannie Mae said similar resolutions with other financial firms could be reached.