With a billion-dollar payment, the major Swiss bank UBS can end a legal dispute in the USA over junk mortgages from the years 2006 and 2007. The bank has reached an agreement with the US Department of Justice to settle the matter related to the issuance and sale of Residential Mortgage Backed Securities (RMBS), UBS said on Monday evening.
RMBS is a tradable security backed by a pool of residential real estate loans. The securitization of poorly rated loans triggered the global financial crisis in 2008.
As part of the settlement, $1.435 billion would be paid to settle all of the US Department of Justice’s civil claims in the matter, it said on Monday. According to UBS, the sum of the settlement was already fully deferred in earlier periods and will therefore not affect the result.
