Former Fannie Mae CEO reaches final $100,000 subprime mortgage settlement

Servicing

The final chapter in the government-sponsored enterprise executive financial crisis saga is over, once again following the same pattern of the previous accounts.

Former Fannie Mae CEO Daniel Mudd announced in a filing on Monday that he reached a settlement with the U.S. Securities and Exchange Commission for $100,000 over his role in the run-up to the financial crisis as the head of one of the mortgage funding giants, an article in Reuters by Patrick Rucker and Nate Raymond stated.

According to the article, Mudd was the last of six executives at mortgage funding giants Fannie Mae and Freddie Mac sued by the SEC in 2011 to reach a settlement.

From the article:

Like Mudd, the other five defendants reached relatively small settlements, none exceeding $250,000, despite facing SEC suits in what were among its biggest cases to arise from the financial crisis and mortgage meltdown.

Under the settlement, the court papers said Mudd would contribute or cause to contribute $100,000 to an account with the U.S. Treasury Department. The settlement leaves open who will pay the amount.

The article noted that Mudd did not admit to wrongdoing in settling.

Mudd’s story echoes the settlements of the five GSE executives before him.  

Fannie Mae’s former Chief Risk Officer Enrico Dallavecchia and Former Chief of the Single-Family Operation Thomas Lund were also originally charged in the 2011 SEC filing for misleading investors about the entity’s exposure to risky subprime mortgages. Each served at the firm between 2005 and 2009.

According to a report from the Wall Street Journal, the SEC reached a settlement agreement with Enrico Dallavecchia, Fannie Mae’s former chief risk officer, and Thomas Lund, Fannie Mae’s former chief of the single-family operation, for a mere $35,000 in September of 2015.

Meanwhile, the lawsuit against executives at Freddie during the crisis also ended with a whimper, with the execs settling for $310,000.

According to multiple reports, including the Wall St. Journal, back in April 2015, the SEC reached a settlement agreement with former Freddie Mac CEO Richard Syron and former senior executives Patricia Cook and Donald Bisenius.

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