Based on the settlement, UBS will pay nearly $415m to Fannie Mae and $470m to Freddie Mac to resolve certain claims and violations of federal and state securities laws related to securities sold to the companies between 2004 and 2007.
FHFA acting director Edward DeMarco said, "The satisfactory resolution of this matter provides greater clarity and certainty in the marketplace and is in line with our responsibility for preserving and conserving Fannie Mae’s and Freddie Mac’s assets on behalf of taxpayers."
In 2011, FHFA filed a case against UBS and 17 other financial organizations, and until now it has settled three cases and is committed to satisfactorily resolving the remaining suits as well.
The US mortgage finance companies, Fannie Mae and Freddie Mac collapsed during the financial crisis of 2008, and since then both are being managed by the FHFA.
FHFA filed 18 lawsuits involving claim of $200bn of mortgage-backed securities sold to both mortgage finance companies by giving materially false statements about the quality of mortgages.
Previously, Citigroup and General Electric have already settled the matter with the FHFA, without divulging the settlement amount.
