Moody’s Investors Service Inc. has agreed to settle charges by a federal regulator that its rating system for residential mortgage-backed securities was deficient.

The New York-based ratings agency previously outsourced models from a corporate affiliate that it used in the rating of RMBS from 2010 through 2013.

But, according to the Securities and Exchange Commission, Moody’s failed to establish and document an effective internal control structure as to the models.

Source: Mortgage Daily