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RBS Will Pay NCUA $1.1B in Mortgage-Backed Securities Probe
Royal Bank of Scotland Group (RBS) will settle two civil residential mortgage-backed securities lawsuits for $1.1B. The payment will go to the National Credit Union Administration (NCUA) and resolves claims accusing the bank of selling faulty MBSs to two corporate credit unions, causing their failure. The federal actions were brought in California and Kansas, respectively. This is one of the largest settlements reached in mortgage-backed securities cases brought against banks.The allegedly toxic RMBSs were sold to Western Corporate Federal Credit Union and the Central Federal Credit Union. By settling, however, RBS is not admitting fault.It was just last year that Royal Bank of Scotland agreed to pay $129.6M to NCUA to resolve claims over its sale of mortgage-backed securities to Members United Corporate Federal Credit Union and Southwest Corporate Federal Credit Union. Both are now defunct, too.
NCUA has also brought cases against other banks, including two that are still in litigation against including UBS Group AG (UBS), and Credit Suisse Group AG (CS) over mortgage products that they sold to credit unions.
Last year, in separate agreements, Barclays Plc (BARC) agreed to settle MBS fraud claims brought by NCUA for $325M, Morgan Stanley (MS) settled for $225M, and Wells Fargo & Corp. (WFC) resolved the allegations against it for $53M.
Meantime, RBS is still working on arriving at a settlement in the RMBS fraud probes brought by the U.S. Department of Justice and the Federal Housing Finance Agency, as well as other civil mortgage fraud lawsuits.
Also still trying to resolve a mortgage fraud case brought by the DOJ is Deutsche Bank AG (DG), from whom the government initially sought $14B to settle allegations accusing the German bank of improperly selling mortgage securities.
If you suspect that your mortgage-backed securities losses are because you were sold toxic mortgages or because they were inappropriately recommended to you, please contact the SSEK Partners Group today.
RBS will pay $1.1B over its role in the global financial crisis, Fortune, September 28, 2016