WMC Mortgage sought bankruptcy protection to resolve remaining legal liabilities over defective loans it originated before the 2008 financial crisis.
The Department of Justice says bank employees ignored the warnings of its primary due diligence vendor about the quality of loans underlying its RMBS.
The Justice Department says the penalty is the largest it has ever imposed for financial crisis-era misconduct at a bank.
The settlements with U.S. authorities ease investor concerns over the impact of the MBS scandal on the shaky European banking industry.
Due diligence vendors described some of the loans underlying the securities as having the “distinct aroma of default.”
