Morgan Stanley rebuts WSJ report of mortgage complaint

Morgan Stanley says it has received no proof of an alleged complaint that it pressured employees to approve certain mortgages as reported in a Wall Street Journal article that cited anonymous sources.

In an email sent in response to inquiries from this publication, Morgan Stanley confirmed statements skeptical of the alleged whistleblower complaint.

"We are unaware of any regulatory matter, inquiry or investigation with regard to or arising from our mortgage lending business, and we do not believe any such matter, inquiry or investigation exists," the company told the Journal.

The news outlet has said that multiple unnamed sources and viewed documents prove Morgan Stanley is facing whistleblower allegations that mortgage employees faced pressure to approve higher-end clients. The company told WSJ it would look into the matter internally.

Other allegations companies have faced

While the complaint against the Wall Street firm had not been externally confirmed at deadline, the WSJ report is a reminder that mortgage employee or executive claims of undue pressure to engage in deals they otherwise wouldn't can lead to regulatory or legal concerns.

Last year, Marlin Mortgage faced allegations from a former executive who said a servicing transfer he faced pressure not to question did not benefit the owner of a portfolio. The company called the allegations "baseless."

LoanDepot engaged in a court battle with a former executive who alleged she faced pressure to participate in an alleged scheme to loosen underwriting standards that ended with a jury finding in favor of the company and a dismissal of the case.

Also, Wells Fargo's mortgage unit faced regulatory allegations of cross-selling pressure in 2015.

Pressure to approve loans to make sales quotas also was common just before the Great Financial Crisis' housing crash, prior to the implementation of regulations aimed at preventing this.