Citigroup Inc. has reached a settlement with a federal agency that had accused the bank of misleading Fannie Mae and Freddie Mac into buying $3.5 billion of mortgage-backed securities, Reuters reported yesterday. The settlement with the Federal Housing Finance Agency was disclosed in a filing yesterday 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. FHFA representatives said that the settlement was "satisfactory" but declined to say how much Citi would pay. 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. The FHFA settled a separate lawsuit in January, in which it had accused General Electric Co. of misleading Freddie Mac into buying $549 million worth of securities. Terms of that deal were also confidential.
