‘Shoddy’ mortgage bonds: Credit Suisse agrees to pay $885m
FHFA says settlement resolves all of its claims in two lawsuits against Credit Suisse.
WASHINGTON:
Swiss bank Credit Suisse has agreed to pay $885 million to settle the US charges it sold shoddy mortgage bonds to Fannie Mae and Freddie Mac ahead of the financial crisis. Credit Suisse will pay about $651 million to Fannie and $234 million to Freddie, said the Federal Housing Finance Agency (FHFA), the conservator of the two companies rescued by the government during the 2008 financial crisis. The FHFA said the settlement resolves all of its claims in two lawsuits against Credit Suisse. The claims alleged that Credit Suisse misrepresented the quality of billions of dollars of mortgage-backed securities it sold to Freddie and Fannie during 2005-2007. Credit Suisse agreed to the settlement while still vigorously denying the allegations in both cases. The agency said the bank’s documentation for the securities contained misstatements and omissions of material facts concerning the quality of the underlying mortgage loans, credit worthiness of borrowers and the practices used to originate such loans.
Published in The Express Tribune, March 23rd, 2014.
Swiss bank Credit Suisse has agreed to pay $885 million to settle the US charges it sold shoddy mortgage bonds to Fannie Mae and Freddie Mac ahead of the financial crisis. Credit Suisse will pay about $651 million to Fannie and $234 million to Freddie, said the Federal Housing Finance Agency (FHFA), the conservator of the two companies rescued by the government during the 2008 financial crisis. The FHFA said the settlement resolves all of its claims in two lawsuits against Credit Suisse. The claims alleged that Credit Suisse misrepresented the quality of billions of dollars of mortgage-backed securities it sold to Freddie and Fannie during 2005-2007. Credit Suisse agreed to the settlement while still vigorously denying the allegations in both cases. The agency said the bank’s documentation for the securities contained misstatements and omissions of material facts concerning the quality of the underlying mortgage loans, credit worthiness of borrowers and the practices used to originate such loans.
Published in The Express Tribune, March 23rd, 2014.