On 6 March, NYAG fined RBS $500mn for misconduct leading to crisis.
- Settlement with Royal Bank of Scotland for deceptive practice, misrepresentation.
- Bank used deceptive practices with packaging, marketing, sale, issuance of RMBS.
- Diligence vendors warned RBS of securitization loans failed underwriting standard.
- Number of mortgage loans backing RBS RMBS, had loan-to-value ratio over 100%.
- After finding problem, RBS kept buying and securitizing loans from the originators.
- Loan pools backing the securitizations, suffered billions of dollars collateral losses.
- Investors had shortfalls in principal and interest payments, fall in certificate value.
- Settlement $100mn for NYS; $400mn in relief for NYers affected by housing crash.
- RBS to provide NYers, with funds to spur construction of more affordable housing.
- Other resources to help communities transform code enforcement systems, invest
in land banks and purchase distressed properties to keep predatory investors away.
- Independent compliance monitor responsible for ensuring that the targets are met.
- RBS admits selling RMBS backed by mortgage loans which did not meet guidelines.
- Contrary to representations, did not materially comply with underwriting guideline.