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» VISIT US ONLINE @ DSNEWS.COM 79 New York RANK: 2 90+ Day Foreclosure Unemployment Delinquency Rate Rate Rate NOVEMBER 2014 2.69% 4.21% 5.8 YEAR AGO 2.89% 5.58% 7 YEAR-OVER-YEAR CHANGE -7.0% -24.6% -1.2 Top County SULLIVAN COUNTY 90+ Day Foreclosure Delinquency Rate Rate NOVEMBER 2014 2.96% 2.21% YEAR AGO 3.18% 1.59% YEAR-OVER-YEAR CHANGE -6.9% 38.5% Top Core-Based Statistical Area AMSTERDAM, NY 90+ Day Foreclosure Delinquency Rate Rate NOVEMBER 2014 5.11% 8.17% YEAR AGO 4.84% 9.48% YEAR-OVER-YEAR CHANGE 5.4% -13.8% note: The 90+ day delinquecy rate is the percentage of outstanding mortgage loans that are seriously delinquent. The foreclosure rate is the percentage of outstanding mortgage loans currently in foreclosure. State rank is based on the November 2014 foreclosure rate. All fi gures are rounded to the nearest decimal. The unemployment rate refl ects preliminary November 2014 fi gures released by the Bureau of Labor Statistics. All other data courtesy of LPS Data & Analytics. New York Todd Yovino Broker/Owner Island Advantage Realty, LLC Metropolitan New York and Long Island's Default Specialist for Over 26 Years Todd@iarny.com | 631-820-3400 www.islandadvantage.com IN THE NEWS Morgan Stanley in Settlement Talks with New York AG Over Subprime Loans Claims Morgan Stanley is currently negotiating a possible settlement with the office of New York Attorney General Eric Schneider- man over claims of mishandling subprime mortgage loans in the run-up to the housing market crash and financial crisis, according to multiple media reports. According to a regulatory filing from Morgan Stanley, the New York AG said on January 13 that it planned to file a lawsuit against the investment firm under the Martin Act, a New York law that allows the state's AG to file such suits with regards to financial fraud. e suit in this case is over alleged omissions of material information for 30 sub- prime securitizations on the part of Morgan Stanley, calling into question the investment firm's due diligence, underwriting, and valua- tion processes, according to reports. A spokesperson from Schneiderman's office, when reached by email, declined to comment on the lawsuit or the possibility of a settlement. According to Morgan Stanley's regulatory filing, the investment firm dis- agrees with the allegations and has presented Schneiderman's office with defenses, the reports said. e settlement talks with the New York AG are separate from an agreement Mor- gan Stanley made last week with the U.S. Department of Justice to pay $2.6 billion to resolve similar claims regarding the handling of residential mortgage-backed securities (RMBS). Morgan Stanley Makes Bid to Have Two FHFA RMBS Suits Dismissed Attorneys for Morgan Stanley made a motion in the New York Supreme Court to dismiss two lawsuits filed by the Federal Housing Finance Agency (FHFA) accusing the firm of failing to buy back $2.5 billion worth of faulty residential mortgage-backed securities (RMBS), according to media reports. FHFA, which is suing on behalf of the RMBS pools' trustees, claimed Morgan Stanley committed a breach of contract by failing to buy back the poor performing loans, which were pooled into securities and sold to Freddie Mac in 2007, according to reports. A year later, both Freddie Mac and Fannie Mae required a government bailout of $188 billion and were taken under conserva- torship of FHFA. According to reports, Morgan Stanley's attorneys argued to Judge Marcy Friedman that the case should be dismissed because FHFA "had no standing" to file a complaint, since the statute of limitations had expired. e firm's attorneys cited precedent set with a New York appeals court ruling in a similar case, ACE Securities Corp. et al. v. DB Structured Products, in which the complaint was dismissed because the plaintiff did not file the complaint until after the statute of limitations had expired. According to FHFA, Morgan Stanley knew the poor quality of the loans it sold to Freddie Mac but still failed to repurchase or cure them, which constituted a breach of contract. e FHFA's attorneys argued that a clause exists in the contract that was not present in the ACE Securities case and that that statute of limitations had not expired, since the clock for a breach of contract suit doesn't begin until the trustee is informed of the breach, according to reports. "We believe these cases were timely brought and investors should be allowed to pursue their claims for the extraordinary losses that were suffered," said Steven Molo, an attorney for FHFA, in an email. Attorneys for Morgan Stanley could not immediately be reached for comment. e two cases are Federal Housing Fi- nance Agency vs. Morgan Stanley ABS Cap- ital and Federal Housing Finance Agency vs. Morgan Stanley Mortgage Capital Holdings, both in the New York Supreme Court. Friedman did not issue a decision on dismissing the two FHFA lawsuits against Morgan Stanley. She did, however, rule against dismissing a similar suit for $281 mil- lion in April 2014 brought about by Israel's biggest bank, Bank Hapoalim BM, which accused Morgan Stanley of misrepresenting risky RMBS it sold to the Israeli bank. In February 2014, the firm settled a sepa- rate lawsuit filed by FHFA for $1.25 billion over the selling of faulty RMBS to Fannie Mae and Freddie Mac during the run-up to the financial crisis. is suit was one of 18 that FHFA filed against financial institutions over packaging and selling of toxic RMBS; the only two institutions yet to settle with FHFA out of those 18 are Nomura Holding America and the Royal Bank of Scotland. e institutions that have settled have paid a combined total of about $24 billion. In July 2014, Morgan Stanley agreed to pay $275 million to investors for allegedly misrepresenting the delinquency status of subprime mortgage loans in 2007. en, in September 2014, Morgan Stanley settled for $95 million with the Public Employees'

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