Ally Strikes Deals With Regulators Over Mortgage Suits

   By Andrew R. Johnson 
 

Ally Financial Inc. is settling lawsuits brought by federal regulators over mortgage-backed securities as the government-owned auto lender takes another step toward putting litigation woes behind it.

The Detroit-based company said Tuesday it will take a $170 million charge in the third quarter for the settlements with the Federal Deposit Insurance Corp. and Federal Housing Finance Agency, the regulator for government-backed mortgage-finance firms Freddie Mac (FMCC) and Fannie Mae (FNMA).

The specific amount and terms of each settlement haven't been disclosed, said Gina Proia, a spokeswoman for Ally.

The cases brought by the FHFA and FDIC were excluded from a release Ally received under an agreement it reached this summer with its subprime mortgage subsidiary, Residential Capital. That deal, which also included ResCap's creditors, granted Ally a release from litigation in exchange for a $2.1 billion payment to ResCap's bankruptcy estate.

"These settlements are key steps in Ally addressing its remaining legacy mortgage risks," said Michael Carpenter, chief executive officer of Ally, in a statement.

The FHFA and Freddie Mac will retain some claims against Ally's banking subsidiary, Ally Bank, as a former mortgage seller and servicer.

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