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The MReport Webcast: Friday 2/12/2016

Morgan Stanley is the latest firm to settle federal and state probes concerning deceptive handling of mortgage-backed securities. This settlement will mark the fourth deal struck among big U.S. banks’ and investment banking firms for their contributions to the 2008 financial crisis.

In February 2015, Morgan Stanley entered into a settlement with the Justice Department for 2 point 6 billion dollars to resolve claims that the investment firm packaged and sold toxic MBS in the run-up to the crisis. The 3 point 2 billion settlement, announced Thursday by federal and state authorities and Attorney General Eric T. Schneiderman, includes 550 million dollars that will be allocated to New York State.

Although lenders are being selective of whom they lend to in terms of credit score, overall, mortgage lending standards have eased every quarter over the last two years. Could this be the beginning of yet another financial crisis? According to a Fed survey, during the fourth quarter of 2015, 11 of the 63 banks surveyed noted that credit standards on GSE-eligible loans had eased somewhat, while two banks said lending was tight somewhat. Government residential mortgages eased somewhat for four of the 59 banks questioned and tightened for four banks.

About Author: Seth Welborn

Seth Welborn is a Harding University graduate with a degree in English and a minor in writing. He is a contributing writer for MReport. An East Texas Native, he has studied abroad in Athens, Greece and works part-time as a photographer.
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