Nevada, RBS Settle Subprime Investigation for $42 Million
RBS Financial will pay $42 million to settle an investigation launched by Nevada Attorney General Catherine Cortez Masto that focused on the firm’s purchase and securitization of subprime and payment option adjustable rate mortgages, HousingWire reported Oct. 24.
The investigation into the firm’s practices centered on the subprime activities of Countrywide and Option One, which originated mortgages securitized by RBS between 2004 and 2007, HousingWire reported.
“I remain committed to enforcing Nevada’s laws against the players — including those on Wall Street — that contributed to and profited from reckless and deceptive mortgage lending in Nevada,” Masto said in a news release, HousingWire reported. “The payment from RBS will alleviate some of the injury to the Silver State and its residents. The changes to its securitization process should help make sure that we do not go down this road again.”
Mastro’s office alleged that RBS did not perform sufficient due diligence on the loans, and had they done so, they likely would have uncovered many borrowers who took out mortgages that they were unable to repay or refinance.
According to the news release issued by Masto’s office, RBS will commit to certain changes in its practices associated with securitization operations concerning mortgages originated and serviced within the state, HousingWire reported.