PNC agrees to $89 million settlement for loans sold to Freddie Mac

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PNC Bank has reached an agreement in principle with the Federal Home Loan Mortgage Corp. to substantially resolve all indemnification and repurchase obligations related to loans sold to Freddie Mac between 2000 and 2008.

Under the terms of the agreement, PNC Bank will pay Freddie Mac a total of $89 million -- less credits of $8 million -- to resolve some existing and future repurchase obligations related to about 900,000 loans and to pay Freddie Mac for losses and potential future losses related to loan denials, mortgages granted and then pulled back, and cancellations of mortgage insurance.

The agreements remain subject to final documentation and approvals by Freddie Mac and Fannie Mae's regulator.

PNC agreed to the settlement amount for accounting on the loans completed Sept. 30.


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