Last week’s settlement between Goldman Sachs and several regulators, including the U.S. Department of Justice, for 5 billion dollars to resolve claims of mortgage-backed securities fraud has fueled speculation among analysts that the Royal Bank of Scotland will reach a settlement in the next few weeks to resolve claims. The British-based RBS is one of 18 financial institutions sued by the Federal Housing Finance Agency in 2011 to recoup U.S. taxpayer costs following the government's bailout of Fannie Mae and Freddie Mac in 2008.
FHFA sued RBS in the U.S. District Court in Connecticut over the selling of approximately 32 billion dollars worth of faulty mortgage-backed securities to Fannie Mae and Freddie Mac before the crisis. FHFA claims that the GSEs relied on false and misleading statements made by RBS when purchasing the mortgage-backed securities, causing the Enterprises to suffer massive losses. FHFA is said to be seeking as much as 13 billion dollars in damages the lawsuit.
Freddie Mac’s total mortgage portfolio contracted at a compound annualized rate of 0.4 percent in November, ending a string of nine consecutive months of expansion, according to Freddie Mac’s November 2015 Monthly Volume Summary. The contraction rate for November calculated to an over-the-month decline of approximately 629 million dollars. The value of Freddie Mac’s total mortgage portfolio at the end of November stood at 1 point 9319 trillion dollars.