PNC, Freddie Mac agree to settle
PNC Bank will have to shell out about $89 million to settle with the Federal Home Loan Mortgage Corp. (Freddie Mac) on about 900,000 loans.
PNC Financial Services Group Inc. announced the agreement Friday morning to pay Freddie Mac the $89 million — minus about $8 million in credits — to resolve existing and future repurchase obligations on the loans the bank sold to Freddie Mac between 2000 and 2008. The settlement also compensates Freddie Mac for some past losses and potential future losses because of denials, rescissions and cancellations of mortgage insurance.
PNC Bank is a subsidiary of PNC Financial Services Group Inc.
Friday morning, Freddie Mac officials confirmed the agreement in principle.
The agreement is similar to the one PNC Bank announced with the Federal National Mortgage Association (Fannie Mae) to resolve repurchase demands for loans sold over the same time frame.
Both settlement amounts had been accrued by PNC Bank as of Sept. 30, so they will not count against fourth-quarter earnings. The settlements also need to be approved by Freddie Mac and Fannie Mae's regulator.