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WASHINGTON (AP) — Big British bank HSBC has agreed to pay $550 million to resolve U.S. claims that it misled U.S. mortgage giants Fannie Mae and Freddie Mac about risky mortgage securities it sold them before the housing market collapsed in 2007.
The Federal Housing Finance Agency, which oversees Fannie and Freddie, announced the settlement Friday with HSBC. London-based HSBC is Europe's largest bank and also has extensive operations in the U.S.
HSBC sold the securities to the two mortgage companies between 2005 and 2007. Under the settlement, HSBC is paying $176 million to Fannie and $374 million to Freddie.
The government rescued Fannie and Freddie at the height of the financial crisis in September 2008 when they were on the verge of collapse. The companies received taxpayer aid totaling $187 billion.
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