Morgan Stanley to pay $1.25 billion to resolve mortgage lawsuit

Morgan Stanley to pay $1.25 billion to resolve mortgage lawsuit | Reuters

"Morgan Stanley said it would pay $1.25 billion to the U.S. regulator
for Fannie Mae and Freddie Mac to settle a lawsuit related to the sale
of mortgage-backed securities.


The Wall Street bank will add
$150 million to its legal reserves as a result of the settlement with
the Federal Housing Finance Agency, Morgan Stanley disclosed in a
regulatory filing on Tuesday"

"The FHFA in January said it had recouped
nearly $8 billion through settlements with financial institutions it
sued in 2011 over allegedly false and misleading statements relating to
some $200 billion in mortgage-backed securities sold to Fannie and
Freddie.

The housing authority commenced lawsuits against 18 financial institutions in 2011.

Last December, Deutsche Bank said it would pay $1.9 billion to settle claims, while Citigroup paid $250 million."