New York City (AFP) – Wells Fargo bank said it will pay $869 million to Freddie Mac to settle claims of potential fraud in home loans it sold to the U.S. government-controlled mortgage company.

In a short statement issued Monday night, the California based bank said the agreement will allow it to substantially resolve liabilities on home loans it sold to Freddie Mac before 2009 and the emergence of the financial crisis.

The accord was announced five days after Citigroup said it would pay Freddie Mac $395 million to settle similar claims.

Banks must make assurances to Freddie about the loans before they are sold. If these representations prove false, the bank can be forced to repurchase the loans.

Citi, Wells Fargo and other leading banks have faced a huge number of claims related to problematic loans that were granted during the housing boom.