In the Money

RBS to pay $20 million to Illinois pension funds over crisis-era mortgage bonds

New settlement is bank’s eighth such settlement in recent years
For the third time this year, the Royal Bank of Scotland is about to pay up over the bank’s mortgage practices in the run-up to the housing crisis. RBS has already reached a nearly $5 billion settlement with the Department of Justice and a $500 million settlement with the state of New York. Now, the bank has agreed to a new $20 million settlement with the state of Illinois.
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HomeStreet to sell a piece of its mortgage servicing portfolio

Bank will sell $5B of its single-family MSRs to Matrix Financial
Seattle bank HomeStreet announced this week it will sell a piece of its mortgage servicing rights to Matrix Financial Services. The deal, which includes an unpaid principal balance of $4.9 billion in single-family MSRs, amounts to approximately 20% of the bank’s single-family servicing portfolio.
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New Residential completes $190M acquisition of Lewis Ranieri’s Shellpoint Partners

Shellpoint is the parent company of New Penn Financial and others
New Residential Investment Corp.’s acquisition of Shellpoint Partners, a mortgage vehicle that is owned in part by Lewis Ranieri’s Ranieri Partners, is now complete. The companies announced this week that the $190 million deal, which was first announced in November 2017, is now finalized.
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Morgan Stanley fined for failing to protect clients

Agrees to pay SEC $3.6M for weak policies
Morgan Stanley agreed to pay a $3.6 million fine after regulators determined it failed to detect or prevent the misappropriation of client funds, the U.S. Securities and Exchange Commission said Friday. As part of the agreement, Morgan Stanley did not admit or deny any wrongdoing.
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PwC ordered to pay $625M to FDIC over Taylor, Bean & Whitaker/Colonial Bank audits

Federal judge awards damages over auditor’s “negligent” conduct
A federal judge this week ordered PricewaterhouseCoopers to pay more than $625 million to the Federal Deposit Insurance Corp. due to the auditor’s failure to discover the house of cards that was the mortgage business of Taylor, Bean & Whitaker. Click the headline for the full story.
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Stearns Lending to buy piece of Certainty Home Loans

Certainty will retain name and leadership
Stearns Lending announced recently it will acquire a piece of Certainty Home Loans. The independent mortgage bank has entered into an agreement to acquire an equity interest in Certainty, an independent mortgage lender based in Plano, Texas, that originated $1.4 billion in residential loans last year.
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Former Bankrate CFO admits to defrauding shareholders out of $25 million

Edward DiMaria pleads guilty to accounting and securities fraud
Bankrate’s former chief financial officer admitted in court this week that he cooked the company’s books over a four-year period in a scheme that eventually cost shareholders more than $25 million. According to the DOJ, Edward DiMaria used his position at Bankrate, a publisher, aggregator, and distributor of personal finance content and lead generator for the financial services industry, to artificially inflate the company’s earnings from 2010 through 2014.
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More trouble for Ditech? Company now exploring “strategic alternatives”

Nonbank exited bankruptcy in February, but that may not be enough
Is there more trouble brewing for Ditech Holding Corp., the nonbank formerly known as Walter Investment Management? The company announced this week that its board is about to begin exploring “strategic alternatives to enhance stockholder value.” Included among those alternatives is a potential sale of the company.
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San Francisco’s definition of low income is shocking

HUD says households earning upward of 6 figures qualify for low-income housing
You’re pulling in more than $100,000 a year to support your family of four, and you think you’re doing pretty well, right? Wrong. Not in San Francisco, you’re not. According to the latest report from the HUD, four-person households in the Bay Area that make less than $117,400 can qualify for certain low-income housing programs. That’s the highest in the nation.
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