Citi settles lawsuit by FHFA over $3.5 billion in mortgage securities


Citigroup Inc has reached a settlement of lawsuit by a federal agency accusing the bank of misleading Fannie Mae and Freddie Mac into buying $3.5 billion of mortgage-backed securities, a court filing said Tuesday.

The settlement with the Federal Housing Finance Agency was disclosed in a filing in U.S. District Court in Manhattan, where a series of related cases by the agency against Wall Street banks are pending. The filing did not disclose the terms of the deal.

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The accord marks the second so far out of 18 securities fraud cases the FHFA filed against banks in 2011 over more than $200 billion in mortgage-backed securities sold to Fannie and Freddie.

(Reporting by Nate Raymond in New York; Editing by Leslie Adler)