The Federal Reserve on
Tuesday said it would seek damages from Morgan Stanley due to "a pattern
of misconduct and negligence" in the handling of home loans by one of the
investment bank's mortgage servicing units.
The Fed wants Morgan
Stanley to review foreclosures overseen by the mortgage-servicing unit to
ensure documents were not mishandled and borrowers didn't wrongfully lose their
homes as a result of improper documentation.
The Fed's action seeks
unspecified monetary damages in addition to changes in mortgage-servicing
practices. Morgan Stanley acknowledged it would be responsible for any monetary
penalties assessed by the Fed.
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