Morgan Stanley will pay $3.2B to settle crisis-era RMBS charges

New York state will get $550M of the total

TRD New York /
Feb.February 11, 2016 12:31 PM

Global financial services giant Morgan Stanley agreed to pay $3.2 billion to settle a federal and state probe into Residential Mortgage Backed Securities-related practices that contributed to the 2008 financial crisis.

As part of the settlement, the bank acknowledged that it relaxed its standards for mortgage loans it pooled and sold to the investors, without informing buyers that it had done so. The bank also admitted that loans with material defects were packed into securities and sold.

New York state will receive a sizable chunk of the funds, with $400 million going to mortgage reductions and other forms of relief for customers, and another $150 million paid to the state in cash. State Attorney General Eric Schneiderman co-chaired the legal task force that negotiated the settlement, the Associated Press reported.

“Today’s settlement will bring money to the families and communities that need resources the most, while helping New Yorkers avoid foreclosure and spurring the construction of more affordable housing statewide,” Schneiderman said.

Morgan Stanley – which made $908 million in profit in the fourth quarter of 2015 – had already set funds aside to pay the fine.

The finance giant recently quadrupled its space at Paramount Group’s 1633 Broadway, taking a total of 261,000 square feet.

Another megabank, London-based HSBC, agreed to pay $470 million to settle an investigation into its own financial crisis-era misdeeds last week. [AP]Ariel Stulberg


Related Articles

arrow_forward_ios
1412 Broadway (Credit: Google Maps)

Isaac Chetrit lands $210M refi for Garment District office building

55 Hudson Yards, Facebook CEO Mark Zuckerberg (Credit: Google Maps and Getty Images)

Here’s how much Facebook is paying at Hudson Yards

Hamptons Cheat Sheet: Southampton properties merged into $73M mega listing, Peconic Bay fund earns $99M in real estate taxes … & more

Hamptons Cheat Sheet: Southampton properties merged into $73M mega listing, Peconic Bay fund earns $99M in real estate taxes … & more

Morgan Stanley fund pays $47M for easement rights to Con Ed substation

Morgan Stanley fund pays $47M for easement rights to Con Ed substation

Morgan Stanley lends Werner and partners $150M for Pfizer HQ buy

Morgan Stanley lends Werner and partners $150M for Pfizer HQ buy

16 candidates vie to fill out the rest of Schneiderman’s term

16 candidates vie to fill out the rest of Schneiderman’s term

Real estate’s top cop, Eric Schneiderman, is out. Here’s how he changed the industry

Real estate’s top cop, Eric Schneiderman, is out. Here’s how he changed the industry

Credit research firm inks 28K sf lease in Midtown South

Credit research firm inks 28K sf lease in Midtown South

arrow_forward_ios
Loading...