PNC to pay $81 million to settle bad-home-loan claims

The dominant U.S. banks and the housing finance agencies (Fannie Mae, Freddie Mac) are still sorting blame from the many billions of dollars in stupid mortgages made to people who couldn't pay them back in the 2000s, provoking the economic slump we're still coping with.

PNC Financial Services Group, the biggest bank based in Pennsylvania and one of the 10 largest in the U.S., is the latest to announce a deal: PNC said this morning it's agreed to pay a net $81 milllion to Freddie Mac (Federal Home Loan Mortgage Corp.) "to resolve substantially all indemnification and repurchase obligations related to loans sold to Freddie Mac between 2000 and 2008." The settlement "relates to approximately 900,000 loans" that PNC sold Freddie Mac, the company added. PNC statement here.

PNC had previously told the Securities and Exchange Commission it has reached a similar agreement with Fannie Mae, Freddie's larger rival, notes PNC spokesman Fred Solomon. But PNC won't say how much it's agreed to pay Fannie Mae, other than to say it's already set the cash aside.

The deals are pending approval by the federal regulators who oversee Fannie and Freddie, which lost so much money due to bad loans that they had to be taken over by the government in the 2008 crisis. Both have become less insolvent since extracting billions from Bank of America, Wells Fargo, JPMorgan, Citigroup and other major banks that Fannie and Freddie said sold the group bad or poorly documented loans.