Items Tagged with 'Department of Justice'


Credit Suisse reaches $5.28 billion mortgage bond settlement

Required to provide $2.8 billion in consumer relief
For the second time in as many days, the Department of Justice announced that it reached a multi-billion dollar settlement with a foreign-based bank over its mortgage securitization practices leading up to the housing crisis. On Tuesday, the DOJ announced that it reached a $7.2 billion settlement with Deutsche Bank. Now, it’s Credit Suisse’s turn.
Read More

It's official: Deutsche Bank reaches $7.2 billion RMBS settlement

Largest RMBS settlement ever
Late last year, Deutsche Bank announced that it reached a $7.2 billion settlement with the Department of Justice in connection with the bank’s issuance and underwriting of residential mortgage-backed securities between 2005 and 2007. Although the bank made the announcement in late December, the settlement was not official, but it is now.
Read More

Minnesota's KleinBank accused of discriminatory lending

DOJ accuses bank of redlining minority neighborhoods
Minnesota-based KleinBank excluded minority neighborhoods from its service area for all banking services and engaged in discriminatory lending, the Department of Justice claimed in a lawsuit filed late last week. According to the Department of Justice, none of KleinBank’s branch locations in the Minneapolis-St. Paul metro area is located in a minority neighborhood, a practice known as “redlining.” The bank denies the DOJ's allegations.
Read More

Moody’s reaches $864 million settlement over RMBS credit ratings

Settlement dates back to financial crisis
Moody’s Corp. agreed to pay nearly $864 million to settle claims for its role providing credit ratings for Residential Mortgage-Backed Securities and Collateralized Debt Obligations that contributed to the financial crisis. "Moody’s failed to adhere to its own credit rating standards and fell short on its pledge of transparency in the run-up to the Great Recession," said Principal Deputy Associate Attorney General Bill Baer. 
Read More

Two Ohio-based banks settle "redlining" allegations

Will invest $9 million in minority communities in Ohio and Indiana
A pair of banks based in Ohio must begin increasing mortgage lending in minority neighborhoods in certain areas of Ohio and Indiana as part of a settlement with the Department of Justice, which accused the banks of “redlining.” The DOJ defines redlining as a “discriminatory practice by banks or other financial institutions of denying or avoiding providing credit services to consumers because of the racial demographics of the neighborhood in which the consumer lives.”
Read More

United Shore lands on DOJ hit list, will pay $48M for FHA lending violations

Next in long line of lenders accused of violating False Claims Act
United Shore Financial Services will pay $48 million to settle allegations brought by the Department of Justice, which accused United Shore of violating the False Claims Act by “knowingly originating and underwriting” mortgages that did not meet FHA standards. The settlement makes United Shore just the latest in a long line of mortgage lenders that settled with the DOJ over alleged FHA lending violations.
Read More

DOJ sues Barclays over faulty RMBS claims

Lawsuit dates back to the financial crisis
The ripples from the financial crisis are far from over. Barclays is now the newest bank to get thrown into the spotlight due to a lawsuit filed on Thursday by the U.S. Department of Justice over faulty mortgage-backed securities during the crisis.
Read More

Obama includes handful of bank fraud pardons in major clemency sweep

And it’s not over yet
During his time in office, President Obama has made it a priority to exercise his clemency authority, granting clemency to significantly more individuals than any other president. This time around, in an unusual move, President Obama included a handful of people convicted of financial crimes in his major clemency sweep.
Read More

Ally Financial to pay $52 million in ResCap toxic mortgage bond settlement

Marketed subprime RMBS deals knowing quality of mortgages
Ally Financial will pay $52 million to settle allegations that one of its subsidiaries, Residential Capital (also called ResCap), knowingly marketed mortgage bonds despite the fact that the underlying mortgages were toxic. Under the terms of the settlement agreement, Ally Securities, formerly known as Residential Funding Securities, will immediately discontinue operations and be de-registered as a broker-dealer as an acknowledgment of the improper conduct.
Read More