Morgan Stanley recently completed its $400 million consumer relief obligation that is part of the $3.2 billion mortgage bond settlement it reached last year.
The settlement covers Morgan Stanley’s “deceptive” mortgage bond practices in the run-up to the financial crisis and requires the company to provide $400 million in consumer relief for New York residents affected by the company’s alleged actions.
A new report from Eric Green, the independent monitor of the consumer-relief portion of the settlement, shows that Morgan Stanley provided $28,337,123 in consumer relief for the period ending Oct. 30, 2017. That brought Morgan Stanley’s consumer relief total to $401,690,163, surpassing the company’s $400 million obligation.
“My professionals and I have determined that Morgan Stanley’s submissions and calculations for its consumer-relief credit are correct, and that it has complied with all the terms of the settlement agreement,” Green said in a statement.
According to Green’s office, Morgan Stanley provided consumer relief in the following ways:
- $205,012,079 in financing to support critical-need housing developments
- $126,672,501 in donations to support community stabilization, either by financing the acquisition and remediation of non-performing loans or by making grants for certified community land banks or housing quality improvement and enforcement programs
- $70,005,583 for forgiveness of first-lien and second-lien loan balances owed by individual homeowners
In his report, Green’s office praised the settlement’s structure, which was devised by New York Attorney General Eric Schneiderman’s office and designed to ensure that the consumer relief went to the New Yorkers that needed it most.
“Unlike some other residential mortgage-backed securities settlements, this settlement agreement was conceived as a program to help individuals largely by focusing on blighted and struggling communities,” Green said.
“Morgan Stanley executed its consumer-relief obligations in a manner that achieved this objective,” Green continued. “Grants and other funding to support community revitalization and affordable rental housing accounted for 83% of the total consumer-relief credit earned by Morgan Stanley.”
Green’s office also complimented Morgan Stanley for completing its consumer relief obligation quickly, as the company provided all the required relief in “well under two years.”
