Citigroup Inc. agreed to pay $395 million to Freddie Mac as part of a settlement over defective mortgages sold to the government-controlled home-loan financier, the Wall Street Journal reported today. Citi's settlement covers 3.7 million loans sold to Freddie Mac between 2002 and 2012, the bank said. In July, Citi reached a similar settlement with Fannie Mae for $968 million. Bank of America reached an $11.6 billion settlement with Fannie in January and a $1.3 billion settlement with Freddie in 2011. The federal regulator for Fannie and Freddie has directed the firms to reduce outstanding repurchase demands by the end of the year. The companies had some $5.8 billion in loan repurchase demands outstanding at the end of June, down from $17.5 billion one year earlier.
