FHFA, General Electric Settle Claims over Faulty Securities

The ""Federal Housing Finance Agency"":http://www.fhfa.gov/ (FHFA) and ""General Electric"":http://www.ge.com/ (GE) have reached a settlement to resolve claims of misrepresented mortgage-backed securities (MBS) sold to Freddie Mac.

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The settlement brings to a close one of 18 legal actions filed by FHFA against various financial institutions in its capacity as conservator for Fannie Mae and Freddie Mac.

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Other firms--including ""UBS"":https://themreport.com/articles/ubs-tries-again-to-block-fhfa-lawsuit-2012-11-27, ""Goldman Sachs, and Deutsche Bank"":https://themreport.com/articles/fhfa-suits-against-deutsche-bank-goldman-sachs-to-go-on-2012-11-13--have attempted to get their cases dismissed, though none have succeeded so far.

FHFA's suit, filed in 2011, alleged GE misrepresented the quality of loans contained in $549 million of securities sold to Freddie Mac. The loans collapsed, leading to losses for the GSE and contributing to the financial crisis of the last several years.

FHFA filed a notice of voluntary dismissal as a result of the settlement. U.S. District Court Judge Denise Cote signed the dismissal, effectively ending the action. Details of the settlement were not disclosed to the public.

In a statement, FHFA general counsel Alfred Pollard said, ""This settlement resolves the dispute between FHFA and GE consistent with FHFA's responsibilities as conservator of Freddie Mac. FHFA is pleased this lawsuit has been resolved and appreciates the work of Freddie Mac in this matter.""

A representative for GE did not immediately return a message seeking comment.