BOSTON – Royal Bank of Scotland Group Plc’s RBS Financial Products unit will pay $52 million to settle claims it financed, purchased and bundled unfair residential loans, Attorney General Martha Coakley said last week.
More than $40.2 million will be used for principal reduction and relief for more than 700 borrowers and more than $8.9 million will be paid to the state, Coakley said in an emailed statement. “The securitization of subprime loans by investment banks is a major cause of the economic crisis,” Coakley said. “Investment banks profited handsomely from those securitizations at the expense of homeowners.”
The RBS deal, together with previous settlements with Goldman Sachs Group Inc. and Morgan Stanley, brings Massachusetts settlements with investment banks over securitization practices to more than $200 million, according to the statement. •