Deal OK'd for Fannie to get $537M on Lehman claim

WASHINGTON (AP) - A federal bankruptcy judge has approved Lehman Brothers Holdings Inc.'s settlement with Fannie Mae, allowing 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.

Judge James Peck made the ruling Wednesday. The settlement values at about $2.15 billion Fannie's claim over home loans and mortgage securities it bought from Lehman before the financial crisis. Under rules of Lehman's bankruptcy proceeding, Washington-based Fannie will receive about 25 percent of that.

Fannie and sibling Freddie Mac were rescued by the government in a $187 billion bailout in 2008 after they were hit by massive losses on high-risk mortgages.

Lehman's bankruptcy in September 2008 was the biggest in U.S. history and helped set off the financial crisis.


(Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)

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