New York — Royal Bank of Scotland (RBS) agreed to pay $500m to settle New York’s probe into its marketing of toxic mortgage-backed securities that triggered the financial crisis, moving the government-owned lender a step closer to resolving a series of costly US investigations. The deal boosts the bank’s US settlement costs to $6bn in less than a year for bundling dubious mortgages into top-rated securities and pitching them to investors in 2006 to 2008, before the housing bubble burst. In July, the lender agreed to pay $5.5bn to the Federal Housing Finance Agency to resolve a parallel investigation. A separate probe by the justice department is still pending. RBS was down 0.6% to 258.6 pence at 9.09am in London trading. Edinburgh-based RBS will pay New York $100m in cash and $400m for residents who were hurt by the housing crash, New York attorney-general Eric Schneiderman said on Tuesday in a statement. The deal boost’s New York’s mortgage-bond recoveries from a half dozen banks t...

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