PNC Financial Services Group said Friday it had agreed to pay Freddie Mac $89 million to settle a dispute over home loans sold to the government-controlled mortgage buyer between 2000 and 2008.
The money will compensate for repurchase obligations on about 900,000 problem loans originated and sold to Freddie Mac, plus past losses and potential future losses related to denials, rescissions and cancellations of mortgage insurance, Pittsburgh-based PNC said in a statement.
Most of the loans covered under the settlement stem from mortgages that PNC inherited when it bought troubled National City Bank at the end of 2008 at the height of the financial crisis.
The new agreement follows an earlier settlement PNC reached with Fannie Mae, another government-controlled mortgage buyer, which the bank mentioned in a quarterly filing in November. The cost of that settlement was not disclosed.
The costs of both settlements were covered by reserves, PNC said.
PNC joins other major banks in settling with the two giant mortgage buyers, which have been demanding that lenders repurchase problem mortgages after questioning property values and the accuracy of appraisals.
Bank of America settlements with Fannie Mae and Freddie Mac have totaled nearly $15 billion.
Patricia Sabatini: firstname.lastname@example.org or 412-263-3066.