NPR: The bank recognizes its misrepresentation of mortgage-backed securities risks.
Morgan Stanley knew that it was selling securities backed by residential mortgages with “material defects” — such as loans that were ‘underwater,’ where the loan was larger than the value of the house.
…The $3.2 billion deal represents an increase from the $2.6 billion that Morgan Stanley agreed to pay last year. As NPR’s Yuki Noguchi reports, ‘The final terms now include a program to help struggling homeowners. For instance, New York state alone will receive more than half a billion dollars, the majority of which will go to support local housing programs.’
