JPMorgan, Citi Units Sued by FDIC Over Colonial Sales
JPMorgan Chase & Co. (JPM) and Citigroup Inc. (C) were among the banks sued by the Federal Deposit Insurance Corp. over $388 million in securities sold to Colonial Bank.
The FDIC alleged that the banks misrepresented the quality of the loans underlying residential mortgage-backed securities that Colonial purchased, according to a complaint filed yesterday in federal court in Manhattan.
The misrepresentations included inaccurate loan-to-value ratios based on inflated property values, according to the filing. Also, many of the properties at issue had second mortgages that weren’t disclosed, the FDIC said.
“In many cases, the amount of the undisclosed additional liens was much greater than the owners’ ostensible equity, putting the owner ’under water’ on the day on which this securitization closed,” the FDIC said in the complaint, filed by attorneys David J. Grais, Mark B. Holton, Leanne M. Wilson and Maria Heifetz.
Colonial Bank, of Montgomery, Alabama, was closed by the Alabama State Banking Department on Aug. 14, 2009, and the FDIC was named as a receiver for the institution, according to the FDIC’s website.
Rest here…
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how$
lawyers are expensive
L
Bank crime shouldn’t pay.
It’s an outrage HSBC Bank USA hasn’t had its U.S. banking licenses revoked for money laundering.
You can’t revoke something you don’t have.Thats why thier “under the umbrella” right along with,Beneficial,Citi,Household,there’s a trillion of these babies.