The bank said the $968 million settlement is mostly covered by existing mortgage repurchase reserves. Citi, which reports its second-quarter results on July 15, said it expects to add $245 million to its mortgage repurchase reserve to its second quarter, "which is generally consistent with its repurchase deal."
Shares of Citigroup were up 1.5% at $48.69 in early trading Monday.
The deal, which resolves repurchase claims on 3.7 million residential first mortgage loans, does not release Citi's liability with respect to servicing and other contractual obligations on the loans. It also does not release liability on over 12,000 loans issued over the same period that had certain characteristics, such as those loans sold with a performance guarantee or under a special credit enhancement program.The bank said it believes it is "adequately reserved" for the loans not covered by the agreement. "We have a strong and productive relationship with Fannie Mae. This agreement resolves substantially all potential future repurchase claims from them for loan originations from 2000 to 2012," Jane Fraser, CEO of Citi Mortgage said in a statement. Earlier this year, Bank of America (BAC) entered into a $11.6 billion settlement with Fannie Mae, resolving a long-standing dispute over mortgages sold during the housing boom years. -- Written by Shanthi Bharatwaj New York. >Contact by Email. Follow @shavenk
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV