A.G. Schneiderman-Led State & Federal Working Group Announces $3.2 Billion Settlement With Morgan Stanley
Settlement Includes $550 Million For New York, Including Millions To Help New Yorkers Avoid Foreclosure And Rebuild Their Communities; Significant Resources Dedicated To Transforming Code Enforcement Systems And Combating Proliferation Of Zombie Homes
Settlement Addresses Misconduct That Contributed To The 2008 Financial Crisis
Schneiderman: Today’s Settlement Is Another Victory In Our Effort To Help New Yorkers Rebuild And Hold Banks Accountable
NEW YORK – Attorney General Eric T. Schneiderman today joined members of the state and federal working group he co-chairs to announce a $3.2 billion settlement with Morgan Stanley over the bank’s deceptive practices leading up to the financial crisis. The settlement includes $550 million – $400 million worth of consumer relief and $150 million in cash – that will be allocated to New York State.
The resolution requires Morgan Stanley to provide significant community-level relief to New Yorkers, including loan reductions to help residents avoid foreclosure, and funds to spur the construction of more affordable housing. Additional resources will be dedicated to helping communities transform their code enforcement systems, invest in land banks, and purchase distressed properties to keep them out of the hands of predatory investors.
The settlement was negotiated through the Residential Mortgage-Backed Securities Working Group, a joint state and federal working group formed in 2012 to share resources and continue investigating wrongdoing in the mortgage-backed securities market prior to the financial crisis.