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RBS sued by US regulator over mortgage bonds
Originally posted by 5corpio
Royal Bank of Scotland is being sued for hundreds of millions of dollars by a US regulator for allegedly misrepresenting the levels of risk attached to mortgage bonds it sold.
The National Credit Union Administration (NCUA), which regulates credit unions in America, alleges that a division of the UK bank "systematically abandoned" guidelines that should have governed the quality of the mortgages used in the bonds.
According to a lawsuit filed on Monday, this caused US Central Corporate Credit Union, a Kansas-based credit union, to misjudge the riskiness of the bonds it was buying. The NCUA eventually put US Central into liquidation in March 2009.
The lawsuit, which also targets the companies that issued the original mortgages, is the latest example of US authorities going after alleged wrongdoing in the country's mortgage market in the run up to the financial crisis.
A Senate report published in April said that Wall Street banks sold about $2.4 trillion (£1.48 trillion) in Residential Mortgage Backed Securities (RMBS) to investors between 2004 and 2007, much of which collapsed in value when US house prices started to fall in the middle of 2006.
The NCUA's lawsuit, which was filed in a district court in Kansas, alleges that.........LINK: RBS sued by US regulator over mortgage bonds - Telegraph
The National Credit Union Administration (NCUA), which regulates credit unions in America, alleges that a division of the UK bank "systematically abandoned" guidelines that should have governed the quality of the mortgages used in the bonds.
According to a lawsuit filed on Monday, this caused US Central Corporate Credit Union, a Kansas-based credit union, to misjudge the riskiness of the bonds it was buying. The NCUA eventually put US Central into liquidation in March 2009.
The lawsuit, which also targets the companies that issued the original mortgages, is the latest example of US authorities going after alleged wrongdoing in the country's mortgage market in the run up to the financial crisis.
A Senate report published in April said that Wall Street banks sold about $2.4 trillion (£1.48 trillion) in Residential Mortgage Backed Securities (RMBS) to investors between 2004 and 2007, much of which collapsed in value when US house prices started to fall in the middle of 2006.
The NCUA's lawsuit, which was filed in a district court in Kansas, alleges that.........LINK: RBS sued by US regulator over mortgage bonds - Telegraph