Switzerland's largest bank UBS has agreed to pay $885 million to Fannie Mae and Freddie Mac to settle claims of violating US securities laws in selling bonds to the two mortgage finance companies, the US federal regulator said.
Under the agreement, UBS will pay about $415 million to Fannie Mae and $470 million to Freddie Mac to resolve US government claims that it went against US securities laws in its sales of mortgage-backed bonds to the two enterprises between 2004 and 2007, reported Xinhua.
FHFA, the federal regulator for Fannie and Freddie, filed suits against UBS and 17 other banks in 2011, alleging they mipresented the quality of mortgage-backed securities worth a total of $200 billion during the years of the housing bubble.
UBS is the third bank to reach an agreement with FHFA after Citigroup and GE Captital, which have not yet disclosed the amounts of the settlement.
Fannie and Freddie, which are government-sponsored enterprises, buy mortgage products from banks and other mortgage holders to provide funding for the housing market.
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They were pushed into insolvency and later under the conservatorship of the federal government since 2008 by losses from sub-prime mortgages in the housing crisis.
The US government has given out more than $150 billion in order to bail out the two mortgage giants.