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the latest SECONDARY MARKET Or ig i nat ion s e r v ic i ng Carpenter, adding that the bank is "pleased to be able to put these matters behind us." Ally isn't the only bank to come to a settlement with FHFA, which—in its capacity as conservator for Fannie Mae and Freddie Mac—brought claims against more than a dozen banks for allegedly misrepresenting loans sold to the GSEs. JPMorgan Chase recently struck a deal in its push to end a number of mortgage-related investigations, and Citigroup, UBS, and General Electric have all settled this year. FHFA Rates Index Up in September, Loan Amounts Down T JPMorgan, FHFA Settle over Soured Loans The bank will pay a total of $5.1 billion to the agency and the GSEs. J PMorgan Chase reached agreements to resolve its mortgage-backed securities (MBS) litigation with the Federal Housing Finance Agency (FHFA) and rep and warranty repurchase claims from Fannie Mae and Freddie Mac. Altogether, the bank has agreed to pay $5.1 billion—$4 billion to address FHFA's claims of alleged violations of federal and state securities laws in connection with private-label securities (PLS) purchased by the GSEs and another $1.1 billion to cover repurchase claims on whole loans sold to the GSEs between 2000 and 2008. The $4 billion payment relates to approximately $33.8 billion of securities sold to Fannie and Freddie between 2005 and 2007 by JPMorgan, Bear Stearns, and Washington Mutual. The bank said the "settlement resolves the firm's largest MBS case." Under the terms of the agreement, approximately $2.74 billion will go to Freddie Mac and $1.26 billion to Fannie Mae. "The satisfactory resolution of the private-label securities litigation with JPMorgan Chase & Co. provides greater 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," said FHFA acting director Edward J. DeMarco. "This is a significant step as the government and JPMorgan Chase move to address outstanding mortgagerelated issues." This is the fourth resolution reached out of 18 lawsuits filed by FHFA in 2011 against banks over MBS dealings prior to the crisis. In separate settlements, JPMorgan Chase resolved representation and warranty claims with Fannie Mae and Freddie Mac related to single-family mortgage purchases by the two companies. Under the terms of the agreements, the bank will pay $670 million to Fannie and $480 million to Freddie. Freddie Mac's CEO, Donald H. Layton, said the settlements "represent solid progress" in the GSE's "efforts to resolve legacy issues and recoup funds that are due to America's taxpayers." Likewise, Fannie Mae's CEO, Timothy J. Mayopoulos, said the agreement "compensates taxpayers for losses fairly" and at the same time "allows Fannie Mae and JPMorgan Chase to move forward as strong business partners." JPMorgan said in a statement, "Settlements totaling $5.1 billion are an important step towards a broader resolution of the firm's MBS-related matters with governmental entities and reflect significant efforts by the Department of Justice and other federal and state governmental agencies." The M Report | 59 se c on da r y m a r k e t he Federal Housing Finance Agency's (FHFA) mortgage rates index rose for the fourth consecutive month in September. According to FHFA, the contract rate on the composite of all mortgage loans in September—based on an index of new mortgage contracts—was 4.36 percent, an increase of 11 basis points from August. The effective interest rate, which has initial fees and charges over the life of the mortgage added, was 4.51 percent, also up 11 basis points. FHFA's interest rate survey also showed the average interest rate on conventional, 30-year fixed-rate mortgages (with conforming loan balances) was 4.63 percent, an increase of 14 basis points. The National Average Contract Mortgage Rate for the Purchase of Previously Occupied Homes by Combined Lenders—used as an index in some adjustable-rate mortgage contracts—was 4.38 percent for loans closed in late September. Because interest rates are typically locked in 30 to 45 days before a loan is closed, September's data reflect market rates from mid- to late August. The average loan amount for all loans fell in September, dropping $4,400 from August to $270,100. A na ly t ic s September's mortgage rates survey climbs 11 basis points.

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