Massive multi-million dollar mortgage settlement reached

by MPA26 Jan 2016
A number of big banks have settled with one state to settle allegations of misrepresenting mortgage securities.

The Commonwealth of Virginia recovered over $63 million from eleven banks in the settlement following allegations that the banks misled the state and the state’s retirement system into purchasing misrepresented mortgage –backed securities.

"This case breaks new ground for Virginia, recovering millions for Virginia taxpayers from banks that we alleged had misrepresented the products they sold to the Commonwealth," Attorney General Mark Herring said. "Today's settlement, which represents significant relief to VRS, taxpayers and pensioners of the Commonwealth, is one of the largest of its kind in the nation."
It was the largest non-healthcare-related recovery, according to a statement from Herring’s office.
The case was originally brought forth by a relator, Integra REC, on behalf of the state. It asserted both common law and statutory causes of action.

“Attorney General Herring intervened and brought the case on behalf of the Commonwealth of Virginia and the Virginia Retirement System,” the office said. “The Commonwealth sought to recover $383 million in alleged damages, including $250.66 million of realized losses.”

The settlement includes:
  • Countrywide Securities Corporation and Merrill Lynch, Pierce, Fenner & Smith, Inc. (combined): $19,500,000.00 in total
  • RBS Securities Inc.: $10,000,000.00
  • Barclays Capital Inc.: $9,000,000.00
  • Morgan Stanley & Co. LLC: $6,900,000.00
  • Deutsche Bank Securities Inc.: $5,621,897.00
  • Citigroup Global Markets Inc.: $4,750,000.00
  • Goldman, Sachs & Co.: $2,900,000.00
  • HSBC Securities (USA) Inc.: $2,500,000.00
  • Credit Suisse Securities (USA) LLC: $1,200,000.00
  • UBS Securities LLC: $850,000.00


  • by SBHarkness | 1/26/2016 2:50:21 PM

    This is absolutely ridiculous! This is chump change to these big banks. The entire settlement from all of the above mentioned banks is less than the compensation package paid to anyone of their CFO's and this is touted as some kind of punishment? PLEASE...the average rank and file American may be fooled by those numbers but that so called multi-million dollar mortgage settlement is nothing more than the cost of doing business for the "2 Big To Fail Banks" that instead of being busted up when they almost wiped out the American economy were allowed to become even bigger because the banks had their key people inside Congress. They had contributed to the right Congressman's campaign so they knew the anti trust legislation being talked about would never get off the floor in the form of a bill. They did something in Nov of 2014 when most in Congress had gone home for the Thanksgiving Holiday they had an earmark slipped in a key bill that had to pass to keep Government funded. What did the earmark say. In layman's terms it said that the American taxpayer were once again on the hook if the 2 Big To Fail Banks lost their shirts again in their speculative and risky investments. Those of you who believe Congress works for the American people are either naive or misinformed because they do not give a damn about anybody but their overlords...the Megabanks. Who controls the Megabanks? The Federal Reserve who is a privately owned group traded on Wall Street except you or I are not allowed to buy shares.

  • by Doris | 1/26/2016 8:44:11 PM

    The thing that should have happened was some of these big shots should have served some time for what they did to our economy and the people. Being an real estate agent, I can tell you that they had you by the balls when negotiating. They definitely knew what they were doing and all they get is a small fine for doing this. Shameful


Should CFPB have more supervision over credit agencies?