Mortgage Observer

BofA Agrees to $16B in Penalties for Bad RMBS—the Biggest Settlement in American History

BofA

Bank of America has agreed to pay over $16.6 billion to end federal and state probes into its mortgage bond sales, U.S. Attorney General Eric Holder announced in Washington, D.C. this morning. The fine—which takes the form of penalties as well as consumer relief—is the largest civil settlement with a single entity in American history.

While other banks have paid hefty sums to settle similar claims (Citigroup paid $7 billion and J.P. Morgan $13 billion), the punishment is by far the most severe meted out by the government for behavior pre-2008.  Read More

Mortgage Observer

Debt Pioneers: Starwood Property Trust’s Brain Trust

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This past October, after three and a half-weeks of negotiations, Starwood Property Trust and a fund controlled by Starwood Capital Group originated the REIT’s largest transaction so far—$475 million in combined acquisition and construction financing for a joint venture to develop Times Square Gateway Center, a 340,000-square-foot multi-use complex in the busiest area of Manhattan.

After a run of about three years, Starwood Property Trust, which real estate investor Barry Sternlicht took public in August 2009, has “entered the big league,” as FBR Capital Markets analyst Gabe Poggi wrote in a report after the release of the REIT’s third-quarter 2012 results. Read More