HSBC In $550 Mln Settlement With FHFA Over Mortgage-Backed Securities

(RTTNews) - HSBC (HSBC, HSBA.L) Friday agreed to pay $550 million to the U.S. Federal Housing Finance Agency to settle claims that the company made false representations in selling mortgage bonds to Fannie Mae and Freddie Mac before the financial crisis.

The claims were brought by FHFA in 2011 for the residential mortgage-backed securities ('RMBS') that Fannie Mae and Freddie Mac purchased from HSBC between 2005 and 2007.

HSBC said it is the seventeenth institution to reach a settlement with FHFA and was not among those alleged to have committed fraud.

HSBC ceased U.S. issuance and distribution of RMBS in 2007.

"We are pleased to have resolved this matter," said Stuart Alderoty, Senior Executive Vice President and General Counsel for HSBC North America.

To date, all principal and interest payments have been made on the securities related to the settlement, the company said.