By Bonnie Sinnock, National Mortgage Newsm October 2, 2017
Morgan Stanley is close to finishing the distribution of consumer relief it agreed to in order to settle a residential mortgage-backed-securities-related complaint with New York State.
The Wall Street firm’s total for distributed relief through Aug. 1 fulfills 93% of the $400 million requirement put in place to settle claims the company’s RMBS activity violated state law. The company’s settlement monitor previously had determined that it had fulfilled 85% of its obligations through June 30.
“Nineteen months after the settlement agreement was signed, Morgan Stanley has nearly completed its obligation to provide relief to New York communities in need of housing assistance,” said Eric Green, an independent monitor of the settlement, in a press release.
The relief distributed through Aug. 1 includes more than $29 million for a neighborhood stabilization grant used to acquire and remediate nonperforming loans on abandoned properties.
Morgan Stanley also funded a more than $4.3 million grant that supports critical-need housing and associated services in Buffalo, N.Y.; and more than $1 million in grants to 15 municipalities and agencies that support housing programs.
The company must complete all consumer relief obligations under the settlement agreement by Sept. 30, 2019 and received a 115% early incentive credit for all forms of consumer relief it offered or completed by Feb. 11 of this year.
The relief is part of a larger settlement Morgan Stanley agreed to in 2016 in order to resolve claims the company violated state laws in the packaging, marketing, underwriting, sale, structuring, arrangement and issuance of RMBS.
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