Freddie Mac, Ally Financial fail to disclose $325 million settlement

TRD New York /
May.May 31, 2011 01:05 PM

A $325 million payment from Ally Financial to Freddie Mac has come to light in an exhibit deep within an amended offering document by Ally as part of a planned share sale to the public, according to the Wall Street Journal. Prior to the revelation, neither Ally, General Motors’ former financing arm which is now primarily government-owned, nor Freddie had disclosed the settlement amount, which had only been documented by the companies in their quarterly securities filings.

Like another settlement between the two firms for $462 million last December, this latest does not mark a major setback; the company had already reserved for the potential repurchase expense. However, the lack of detailed disclosure makes it difficult for investors to know how to interpret a deal.

Investors must question how the government is balancing the need to reduce taxpayer loss with avoiding actions that may destabilize banks, the Journal said. Understanding the economics and rationale behind settlements such as the Ally deal is vital.

The Federal Housing Finance Agency, Fannie Mae and Freddie’s regulator, is a year into an inquiry into private-label mortgage securities sold by banks to investors, including Fannie and Freddie. In January, some members of congress also questioned whether mortgage settlements with Bank of America and between Ally and Fannie were actually back-door bailouts. [WSJ]


Related Articles

arrow_forward_ios
Ex-Fannie Mae employee in LA sentenced in bribery, kickback scheme

Ex-Fannie Mae employee in LA sentenced in bribery, kickback scheme

Clockwise from the top left: Jackson Park at 28-40 Jackson Avenue, 240 Willoughby Street in Fort Greene, 664 Pacific Street in Brooklyn, and 247 Metropolitan Avenue in Williamsburg (Credit: StreetEasy, Google Maps, Pacific Park Brooklyn, The Pod Hotel)

These were the top 10 outer-borough loans last month

Jackson Park at 28-40 Jackson Avenue and Tishman Speyer's Rob Speyer (Credit: StreetEasy and Tishman Speyer)

Tishman Speyer locks in $1B in financing for Jackson Park

Cammeby's International Group founder Rubin Schron and, from top: 194-05 67th Avenue, 189-15 73rd Avenue and 64-05 186th Lane (Credit: Google Maps)

Ruby Schron lands $500M refi for sprawling Queens apartment portfolio

1735 York Avenue and Bonjour Capital's Charles Dayan (Credit: Google Maps)

Dayan’s Bonjour Capital inks $115M refi for Upper East Side building

US home mortgage debt surges past pre-recession record

US home mortgage debt surges past pre-recession record

One Bryant Park (Credit: The Durst Organization)

Bank of America leads $1.6B refi for tower named after it at One Bryant Park

MCR Development CEO Tyler Morse and a rendering of TWA Flight Center

Revamped TWA Flight Center at JFK lands $270M loan

arrow_forward_ios
Loading...