NCUA sues Wachovia over MBS losses

[Update 1: Corrects purchase price of securities] The National Credit Union Administration once again filed a lawsuit on behalf of failed credit unions, this time against Wachovia. The agency alleged in a filing Monday that the bank, bought by Wells Fargo (WFC) in 2008, misrepresented mortgage-backed securities and violated state and federal laws in deals with U.S. Central Federal Credit Union and Western Corporate Federal Credit Union. The suit was filed in Federal District Court in Kansas. The corporate credit unions were told the loss risk on the securities was minimal though there was substantial risk, according to the NCUA. The suit is on behalf of a total $161.3 million in securities purchased in 2006, though an agency spokeswoman said the amount of damages sought would be determined at trial. The NCUA has also sued J.P. Morgan (JPM), Royal Bank of Scotland (RBS) and Goldman Sachs (GS) in similar cases. The agency settled suits earlier this month against Citigroup (C) and Deutsche Bank Securities (DB) for $20.5 million and $145 million respectively. “By filing these suits, we intend to hold responsible parties accountable for their actions,” NCUA Board Chairman Debbie Matz said in a release. Any recovery from lawsuits would minimize the cost to the NCUA insurance fund, according to an agency spokeswoman. Write to Andrew Scoggin. Follow him on Twitter @ascoggin.

Most Popular Articles

Airbnb properties wouldn’t make a dent in housing market

While the real estate market has lots of challenges during the COVID-19 pandemic, a tsunami of houses being sold by Airbnb hosts who can’t pay their mortgages isn’t one of them. HW+ Premium Content

Jun 02, 2020 By

Latest Articles

FHA enacts temporary policy shift on forbearances

HUD Secretary Ben Carson said the policy change “will give borrowers, lenders, and the market peace of mind as we continue our road to economic recovery in the United States.”

Jun 05, 2020 By
3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please