RBS Settles Case For $5.5B

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The Federal Housing Finance Agency (FHFA) announced yesterday it reached a settlement with Royal Bank of Scotland Group plc., related companies and specifically named individuals (collectively RBS) for $5.5 billion. The settlement resolves all claims in the lawsuit FHFA v. The Royal Bank of Scotland Group plc et al., Case No. 3:11-cv-1383 in the United States District Court for the District of Connecticut.

FHFA filed the lawsuit in its role as conservator alleging violations of federal and state securities laws in connection with private-label residential mortgage-backed securities trusts purchased by Fannie Mae and Freddie Mac between 2005 and 2007. Under the terms of the agreement, Royal Bank of Scotland will pay approximately $4.525 billion to Freddie Mac and approximately $975 million to Fannie Mae and certain claims against Royal Bank of Scotland related to the securities involved will be released.

FHFA filed a total of 18 lawsuits in 2011 as conservator of Fannie Mae and Freddie Mac alleging violations of various statutory provisions by participants in the mortgage finance sector. The settlement with RBS represents settlement of the 17th case of those filed by FHFA. FHFA received a favorable verdict after trial in the 18th case and that verdict is currently the subject of an appeal.

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RBS Settles Case For $5.5B

by Banker & Tradesman time to read: 1 min