Herring announces settlement after suing major banks

(AP) – Attorney General Mark Herring says the state is recovering more than $63 million from 11 major banks he sued for allegedly misleading the Virginia Retirement System about the quality of certain loans while selling mortgage-backed securities.

Herring’s office announced settlements with the bank Friday. He said it was the largest settlement ever recovered under the Virginia Fraud Against Taxpayers Act not related to healthcare.
    
When he filed the lawsuit in 2014, Herring said nearly 40 percent of the 785,000 mortgages backing 220 securities purchased by VRS were of significantly higher risk than the banks had represented.
    
A Texas-based firm that Herring said used proprietary software to match individual mortgages to the securities they backed will get 25 percent of the $63 million.