BofA, Citigroup among 17 banks in federal lawsuit
Bank of America, Citigroup and JPMorgan Chase were among the 17 lenders sued by the Federal Housing Finance Agency for allegedly misleading Fannie Mae and Freddie Mac about residential mortgage-backed securities.
In lawsuits filed Friday in New York state and federal courts and in federal court in Connecticut, the agency also named as defendants Barclays PLC, Nomura Holdings Ltd., HSBC Holdings PLC, Societe General SA, Morgan Stanley, Ally Financial, Royal Bank of Scotland, Credit Suisse Group AG, Deutsche Bank AG and First Horizon National Corp.
The complaints say the banks misled Fannie Mae and Freddie Mac about the soundness of the underlying mortgages. The housing finance agency is seeking to have some defendants refund the investments with interest and pay other damages, including punitive damages for alleged misconduct.
The agency alleges that the loans "had different and more risky characteristics than the descriptions contained in the marketing and sales materials provided to the enterprises for those securities."