Morgan Stanley Faces Probe on Military Members’ Mortgages
Morgan Stanley, the sixth-biggest U.S. bank by assets, faces a probe tied to mortgages for members of the U.S. military.
Morgan Stanley has received subpoenas and requests for information on matters that include “the company’s compliance with the Service Members Civil Relief Act,” according to the New York-based firm’s annual report today to securities regulators. The subpoenas and requests include those relating to the purchase, origination and servicing of residential mortgages, according to the filing.
The Service Members Civil Relief Act provides financial relief to military personnel on active duty and can delay foreclosures. JPMorgan Chase & Co., the second-biggest U.S. bank by assets, said earlier this month it will forgive mortgages of military families whose homes were improperly seized and revamp its housing program for service members and veterans.
Morgan Stanley is also facing subpoenas and information requests regarding its due diligence on loans it purchased for securitization, communications with ratings companies and its handling of foreclosure-related issues, according to the filing.
Sandra Hernandez, a spokeswoman for the firm, declined to comment.
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