Home > Avid Law Center, Foreclosure > Morgan Stanley Fined for Robo-Signing

Morgan Stanley Fined for Robo-Signing

Morgan Stanley has been ordered by the Fed to review thousands of foreclosures conducted by its mortgage-servicing unit and reimburse homeowners who were improperly forced out of their homes. It was announced on Tuesday that the Fed plans to fine the fine Morgan Stanley over “a pattern of misconduct and negligence” in how the investment bank handles foreclosures.

According to the Wall Street Journal, the order requires Morgan Stanley to hire an independent consultant to the review foreclosures handled by Saxon Mortgage Services, the investment bank’s mortgage-servicing unit which it sold earlier this year, with a focus on foreclosures conducted between 2009 and 2010. The Wall Street Journal reports that “Saxon was the nation’s 34th-largest loan servicer, collecting payments on more than 225,000 home loans. It processed more than 60,000 foreclosures in 2009 and 2010.”

While Morgan Stanley is now part of a larger pool of lenders who have been ordered to conduct independent reviews of their foreclosure practices, this is one of the largest enforcement actions by the Fed.

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