Freddie Mac said it may suffer $690 million of losses due to the bankruptcy and fraudulent activities of Taylor Bean Whitaker, a Florida-based lender that failed 18 months ago and became the subject of a large criminal investigation.
In a new SEC filing, the GSE noted that its estimate does not include possible losses related to Ocala Funding LLC, a TBW affiliate that issued and sold commercial paper to financial institutions.
"Based on court filings and other information, we understand that Ocala or its creditors may assert fraudulent transfer and possibly other claims totaling approximately $840 million against us related to funds that were allegedly transferred from Ocala to Freddie Mac custodial accounts," Freddie says.
The GSE also expects to face claims from Ocala regarding the ownership of residential mortgages it purchased from TBW.
"We are unable to estimate our loss exposure related to any claim against us concerning such loans," Freddie says in the securities filing.
TBW, a nonbank, failed in August 2009, filing for bankruptcy protection. Freddie filed a $1.78 billion claim in the case.
The Florida lender was one of Freddie's largest customers.
