Royal Bank of Scotland has agreed to pay $275m to resolve a US lawsuit accusing it of misleading investors in mortgage-backed securities, lawyers for the plaintiffs said today.

The accord is the third-largest settlement in a US class action against banks that packaged and sold mortgage securities that were at the heart of the 2008 financial crisis.

It must still be approved by a federal judge in New York, 

RBS in a statement said it had already provisioned for the settlement, adding that the result "should not be seen as indicative" of how other mortgage-backed securities cases against it may resolve.

RBS last month said it had set aside £3.1 billion to cover legal claims against it, including £1.9 billion to resolve claims primarily related to mortgage-backed securities. 

The UK government is RBS' largest shareholder, owning about 80% following a £45 billion government rescue in 2008. RBS owns Ulster Bank here.

The settlement came in a 2008 lawsuit led by New Jersey Carpenters Health Fund and the Boilermaker Blacksmith Pension Trust, which had sued over soured mortgage securities issued in 2006 and 2007.

The lawsuit accused RBS and other defendants of violating US securities law in packaging and selling an estimated $25.39 billion of securities in 14 offerings of mortgage-backed securities linked to the Harborview Mortgage Loan Trusts.

RBS was accused of concealing that the mortgage loans did not meet underwriting guidelines.

These securities ultimately sank to junk status, which investors said reflected how their investments were "impaired from the outset."

Other class action settlements over mortgage-backed securities include a $500m deal between Bank of America and investors claiming they were misled by the bank's Countrywide unit. A federal judge approved that settlement in December. 

A separate $315m deal over securities issued by Bank of America's Merrill Lynch unit won court approval in 2012.