- Euro Zone Economy to Shrink in 2012, EU Stagnates
- Santorum Takes Heavy Fire in Arizona Republican Debate
- Winners and Losers in Obama's Corporate Tax Plan
- Stocks Sputter as Investors Seek Next Catalyst
- Where Are UK House Prices Headed?
- Greece Readies Debt Swap Under Bailout Deal
- RBS Hurt by Greek Charges But Pays Bonuses
- Nissan to Recall 250,000 Cars Globally
- T-Mobile USA Wants to Grow Again
- Nike CEO Mark Parker Talks Olympic Product Line
- Wandering Through Toy Land
- Dell Is Done, But Don't Discount HP: Analysts
- Comcast Deal Could Spell Trouble for Netflix: Analyst
- Reading the Tea Leaves in RIM Shake-Up
- Sam Adams Brewer Crafts Beer for the Granddaddy of All Marathons
- Stocks to Give Up for Lent
- You Want Retail Customers? Give Them Deals: Analysts
- NJ Governor Chris Christie to Warren Buffett: 'Just Write a Check and Shut Up'
MOST SHARED
- Euro Zone Economy to Shrink in 2012, EU Stagnates
- T-Mobile USA Wants to Grow Again
- Wife of UK's Tony Blair Sues Over Phone Hacking
- Greece Readies Debt Swap Under Bailout Deal
- German February IFO Index Rises 4th Month in Row
- HP, Dell Watch Rising China Labor Costs for Apple
- Global Markets Update: European Stocks Flat On Euro Zone Economic Outlook
- Greek Writedown Hits Commerzbank Earnings
- UK and Japan Warn Volcker Rule Poses Threat to Recovery
- Santorum Takes Heavy Fire in Arizona Republican Debate
MOST POPULAR
HOT ON FACEBOOK
SEC Probes Banks Over Mortgage Loans
Text Size 
The Securities and Exchange Commission is investigating Royal Bank of Scotland, Credit Suisse and other financial institutions for their handling of problem mortgage loans, according to public disclosures and people familiar with the matter.
 |
Getty Images The U.S. Securities and Exchange Commission seal hangs on the facade of its building in Washington, DC. |
The SEC is examining whether banks misled shareholders about the number of loans they might be forced to buy back because of early defaults – known as loan repurchase requests – and set aside sufficient reserves to fund those purchases or handle related litigation, people familiar with the matter said.
RBS [RBS-LN Loading... ()] disclosed the probe in a regulatory filing last month, saying it relates to “document deficiencies and remedial measures taken with respect to such deficiencies. The investigation also seeks information related to early payment defaults and loan repurchase requests.” RBS said it was co-operating with the investigation and “has not experienced a significant volume of repurchase demands . . . and has not ceased any of its US foreclosure activities”.
Credit Suisse was subpoenaed by the SEC in relation to allegations made in a private lawsuit, according to court filings. MBIA sued Credit Suisse, alleging the bank fraudulently sold securities backed by loans that did not meet underwriting standards.
A spokesman for MBIA said the law firm representing it in the litigation has also been subpoenaed by the SEC for documents related to that lawsuit. Credit Suisse has denied any wrongdoing.
Another facet of the investigation is the examining of whether banks sold investors securities backed by mortgages that they knew fell short of underwriting standards.
The SEC is also looking into whether some banks reached settlements with originators over problem loans but failed either to disclose the pacts or replace the bad loans as required by contract, these people say. The practise is known as “double-dipping” because the banks collect fees twice, once for securitising the loans and again in settlements.
Banks are already under investigation by New York’s attorney-general for similar mortgage practices. The New York prosecutor is probing practises at banks including RBS, JPMorgan Chase [JPM
Loading...
()
], UBS, Deutsche Bank, Goldman Sachs [GS
Loading...
()
], Bank of America [BAC
Loading...
()
] and Morgan Stanley [MS
Loading...
()
] , people familiar with the matter have said.
- People who check a smartphone will soon have another option: Google-made glasses that stream information to the eyeballs.
- How does a business handle complaints on a social network site that goes out to millions of consumers?
- Dr. Ezekiel Emanuel lays out the changes ahead from the Obama healthcare legislation he helped design. Does reform mean greater access and affordability?
- Should a mom or dad stay at home to take care of the kids? It’s a tough issue these days. Here’s Suze Orman’s take.
- Corruption is a major issue in developing and developed nations. So which are perceived as the most corrupt?
- While the handheld gaming market has evolved in recent years, Sony's betting there's still money to be made.
Data is a real-time snapshot *Data is delayed at least 15 minutes
