Ally Financial Statement on FHFA Lawsuit
DETROIT -- Ally Financial Inc. and several related entities have been named in a lawsuit by the Federal Housing Finance Agency (FHFA), along with other financial institutions, related to the sale of residential private-label mortgage-backed securities to Freddie Mac.
Ally believes that FHFA’s claims are meritless, and the company intends to defend its position aggressively. Freddie Mac is a sophisticated investor and elected to take certain risks with respect to purchasing securities. The losses Freddie may have sustained related to those securities are a result of market forces, not any alleged errors or omissions by Ally in connection with the securities.
The company has been successful in reaching settlements with Freddie Mac in March 2010 related to whole loan claims and with Fannie Mae in December 2010 related to both whole loan and private-label security claims.
Ally is disappointed that FHFA elected not to continue a more constructive path of negotiations on this particular issue but rather has chosen to utilize the court process.
Regardless, the company will vigorously defend its position in court and is confident in its ability to prevail.
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