Report RBS May Pay More in FHFA Settlement

first_img in Daily Dose, Government, Headlines, News, Secondary Market Royal Bank of Scotland (RBS) may have to pay additional penalties to settle claims that it sold faulty U.S. mortgage-backed securities in the years leading up to the housing market crash, according to a report from Reuters.RBS had already set aside the equivalent of about $3 billion in U.S. dollars to cover settlement costs relating to the sale of $32 billion worth of faulty mortgage-backed securities to Fannie Mae and Freddie Mac in a case being handled by the U.S. District Court in Connecticut. However, the conservator of the two GSEs, the Federal Housing Finance Agency (FHFA), might ask the bank to pay up to the equivalent of $7.7 billion in U.S. money to settle the claims, according to the report.A spokesperson from FHFA declined to comment on the RBS situation.In June, RBS agreed to pay $99.5 million to settle a separate FHFA suit claiming that the bank sold more than $2 billion worth of faulty mortgage-backed securities to Fannie Mae and Freddie Mac between 2005 and 2007, the years of the “housing bubble” in the U.S.RBS and Nomura Holdings are the last two out of the 18 lenders to settle with FHFA after the agency sued the lenders in 2011 to recoup U.S. taxpayer costs following the government’s $188 billion bailout of Fannie Mae and Freddie Mac in 2008. The other 16 lenders have paid about $24 billion to settle claims, including $9.3 billion paid by Bank of America in March 2014. January 5, 2015 565 Views Sharecenter_img Report: RBS May Pay More in FHFA Settlement Fannie Mae FHFA Freddie Mac Mortgage-Backed Securities Royal Bank of Scotland Settlements 2015-01-05 Seth Welbornlast_img

Leave a Reply

Your email address will not be published. Required fields are marked *