Regions

Ally Financial said it had reached a settlement with the Federal Housing Finance Agency and the Federal Deposit Insurance Corp. The settlements had to do with the company's former subprime home lender Residential Capital or ResCap. The auto and home lender was a recipient of a USD 17.2 billion bailout of the US government at the height of the US housing crisis. The settlements had to do with the company's former subprime home lender Residential Capital or ResCap.

In July, the Federal Reserve said ResCap would pay borrowers subjected to the company's improper foreclosure practices. The total amount for that settlement was USD 230 million. Ally said it had allocated USD 520 million to fund its settlements.

The settlement resulted in a third quarter charge of USD 170 million for Ally for the third quarter. It would, however, end all litigation for Ally. The agreement would also pave the way for ResCap's reorganization. Chief Executive Officer Michael A. Carpenter said in a statement, "These settlements are key steps in Ally addressing its remaining legacy mortgage risks."