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62 | TH E M R EP O RT O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T RBS Settles Fraud Suit THE COMPANY'S COOPERATION LED TO THE CONVICTIONS OF AN RBS TRADER AND RBS SUPERVISOR AND A $35M SETTLEMENT. CONNECTICUT // Based on a release from the District of Connecticut's U.S. Attorney's Office, the Royal Bank of Scotland (RBS) has agreed to pay a monetary penalty of $35 million and an additional $9 million to customers impacted by residential mortgage-backed securities fraud. This also includes firms affiliated with recipients of federal bailout funds through the Troubled Asset Relief Program. Prior to the settlement, the bank released a statement to Reuters: "RBS has zero tolerance for market misconduct. We are pleased to be able to resolve this issue as we continue to build a simpler, stron - ger bank that is fully focused on serving our customers well." RBS employees were convicted for defrauding customers through several methods, which included misleading buyers about a seller's asking price on RMBS and keeping the difference of the price paid by the buyer and by misrepresenting bonds held in RBS's inventory by claiming they were from a false third-party seller. "For years, RBS fostered a culture of securities fraud," said Deirdre M. Daly, the U.S. Attorney for Connecticut. By agreeing to a non-prosecution agreement, RBS Inc. is only ad - dressing its corporate criminal liability and not any potential criminal charges for individuals. "RBS was able to avoid criminal charges in this case only because of its voluntary self- reporting and extraordinary co - operative efforts. By entering into this agreement, RBS has admitted the seriousness of its past criminal conduct and made a clean break," Daly said. According to Special Inspector General for the Troubled Asset Relief Program (SIGTARP) Christy Goldsmith Romero, RBS's cooperation led to the convic - tions of an RBS trader and RBS supervisor. "RBS's cooperation in SIGTARP's investigation and subsequent actions to right this wrong are the correct response when federal law enforcement shows up" she said. RBS would have faced much worse consequences for their conduct if they hadn't cooperated according to FBI Special Agent in Charge of New Haven Division Patricia M. Ferrick. "It is incredibly troubling that RBS supervisors participated in and encouraged lower-level employees to commit securities fraud, then took steps to prevent honest employees from reporting their concerns," Ferrick said. "The U.S. Attorney's Office, SIGTARP, and the FBI have forged a formi - dable partnership in our investiga- tion into fraud in the RMBS and related markets," he said. Ginnie Mae: MBS Breaks Annual Issuance Record OVERALL, THE GSE'S TOTAL ISSUANCE CAME IN AT $504.58 BILLION FOR THE FISCAL YEAR 2017. DISTRICT OF COLUMBIA // Ginnie Mae recently announced that its mortgage back securities (MBS) issuance totaled $504.58 billion for the fiscal year 2017 (FY17)— representing an all-time annual issuance record. Last year, the issuance totaled $466.6 billion. "Ginnie Mae's continued strong growth is a testament to our talented and dedicated profes - sional staff," said Michael Bright, Ginnie Mae Acting President. "In the year ahead we look forward to continuing the performance that has made Ginnie Mae the globally recognized and accepted U.S. government mortgage-backed security." Ginnie Mae's release also re- ports the monthly breakdown of issuance, with the latest informa- tion on September. According to the federal government agency, despite the year-over-year increase, MBS issuance in September totaled $41.58 billion, which represents a decrease from August issuance of $44.13 billion. Further September issuance updates include $39.62 billion of Ginnie Mae II MBS—modified pass-through securities where registered holders receive an ag- gregate principal and interest pay- ment from a central paying agent. The release notes that an issuer may participate in the Ginnie Mae II MBS either by "issu- ing custom, single-issuer pools or through participation in the issuance of multiple-issuer pools, which combine loans with similar characteristics." Additionally, September is- suance on Ginnie Mae I MBS reported $1.96 billion, which provided access to $40.25 billion in capital for single-family home loans and $1.33 billion for multi- family home loans, Ginnie Mae reported. Similar to Ginnie Mae II MBS, the Ginnie Mae I MBS are also modified pass-through securi- ties. However, Ginnie Mae I MBS ensure registered holders receive separate principal and interest payments on each of their certificates. Ginnie Mae reports that these securities can include "single-family, multifamily, manufactured home, and project construction loans." Overall, the total outstanding unpaid principal balance increased to $1.884 trillion—an increase from $1.871 trillion in August 2016. Meanwhile, the total principal balance is up year-over-year from $1.728 trillion at the end of FY16. THE LATEST SECONDARY MARKET

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