Failed firm's settlement over soured mortgage securities must be approved by federal bankruptcy judge
WASHINGTON (AP) — Lehman Brothers Holdings 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% 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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