RBS set to draw line under US mortgages scandal with £3.5bn deal
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Royal Bank of Scotland is close to a deal to resolve the scandal for its role in the sale of so-called “toxic” sub-prime mortgages in the US that played a major role in the onset of the financial crisis of 2008.
Discussions are understood to be at an advanced stage between the state-backed lender and the US Federal Housing Finance Agency, according to reports by Sky News.
Lawyers at Edinburgh-based RBS, which is still 70 per cent owned by the taxpayer, is said to be in the final stages of talks with the FHFA - America’s mortgage regulator - over what could be a £3.5 billion fine.
If progressed, it will be a deal that will remove one of the long-standing obstacles to the Government returning the lender to the private sector.
The settlement with the FHFA relates to the mis-selling of mortgages to the US government-backed loan firms Fannie Mae and Freddie Mac before the financial crisis.
It is believed RBS executives are keen to agree a settlement as soon as possible and a deal could to be only a matter of weeks away.
The move comes after the bank agreed to pay a £200 million compensation offer with the RBS shareholder group earlier this month, following a long-running lawsuit after its near-collapse nine years ago.
RBS has declined to comment on the reports.
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