Fannie would get about $537M in deal with Lehman

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Associated Press

Posted on January 23, 2014 at 6:01 PM

Updated Thursday, Jan 23 at 6:02 PM

WASHINGTON (AP) — Lehman Brothers Holdings Inc. has reached a settlement with Fannie Mae that would allow the mortgage finance giant to recover about $537 million for its claim against the estate of the failed Wall Street bank over soured mortgage securities.

The settlement announced Thursday must be approved by a federal bankruptcy judge. It valued Fannie's claim over home loans and mortgage securities it bought from Lehman before the financial crisis at about $2.15 billion. But under Lehman's bankruptcy proceeding Fannie would get about 25 percent of that.

A Fannie official called it a fair outcome.

Fannie and sibling Freddie Mac were rescued by the government in a $187 billion bailout after they were hit by massive losses on high-risk mortgages.

Lehman's bankruptcy was the biggest in U.S. history.

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