Market News Call

Big News: Federal National Mortgage Association (OTCBB:FNMA), Zynga Inc (NASDAQ:ZNGA)

Banking giant Citigroup would be paying $968 million to Federal National Mortgage Association(OTCBB:FNMA) for resolving potential mortgage repurchase claims for the breaches of representations on loans to the U.S. mortgage guarantor in the last twelve years. Most of the payment would be covered by the reserves in place until March.

The deal has claims numbering to 3.7 million first mortgage loans sold to Fannie Mae during 2000 to 2012. A bunch of loans with numbering lesser than 12,000 and special characteristics were not a part of the agreement.

The deal also does not include warranty claims against the banking giant from the big mortgage finance agency, Freddie Mac. The bank opined that it would record residential mortgage repurchase reserve build of $245 million in quarter two and is the amount that the bank has been keeping for reserves during recent quarters.

Citigroup stocks jumped 1.5 percent whereas Fannie Mae gained 7.1 percent. Stocks of Zynga jumped by over 12% after rumors of Don Martrick, head of Microsoft gaming division taking over the charge from CEO Mark Pincus spread.

A journal said that Zynga Inc(NASDAQ:ZNGA) and Mattrick are in talks for a senior role and it is likely to be the CEO’s role.

Pincus has been attempting to restructure the social-gaming company around mobile but the company’s progress has been rather slow. It has been unable to outweigh erosion in its desktop business.

Earlier in June, Zynga reduced the payroll by almost laying off 18% of its workforce as well as shutting down offices of Los Angeles, Dallas and New York.

Tags: ,

Leave your comment here