A USD 885 million settlement agreement was reached between Swiss bank UBS and the US Federal Housing Finance Agency, the latter said Thursday. There were no admissions of liability or wrongdoing from the UBS, but the agreement was for allegations that it did not accurately represent the mortgage-backed bonds it issued to the nation's two major mortgage finance companies. The terms of the settlement state that USD 415 million will be paid to Fannie Mae and the other USD 470 million to Freddie Mac.

In 2011, the FHFA investigated 18 banks, including UBS, for allegations that they had misrepresented collateral that backed up their securities during the housing bubble. The regulator intends to recover billions of dollars worth of bonds that were sold to the two mortgage finance companies. Fannie Mae and Freddie Mac weathered the financial crisis in 2008 when the US government infused USD 187.5 million in taxpayers' money to their operations. Aside from UBS, Citigroup and General Electric had also settled with the FHFA but no amounts were disclosed.