When many people stopped paying their mortgages beginning in 2006 and accelerating over the next few years, the world economy went south. Wall Street gets blamed for inadequately pricing risk. Now big banks are getting sued over mortgage losses.
REUTERS REPORTS: Seeking a combined $92 million, the lawsuits accuse the banks of misrepresenting the risks of residential mortgages they packaged into securities, causing losses for investors once the poor quality and defective underwriting became evident.
The lawsuits were filed on Friday by the law firm Grais & Ellsworth, which has filed many such lawsuits for other clients over residential mortgage securities.
Two FDIC lawsuits were filed in Manhattan federal court and seek a combined $77 million, while a third filed in Los Angeles federal court seeks $15 million.
Bank of America and Citigroup are the only banks named as defendants in all three cases. Deutsche Bank and JPMorgan are defendants in two cases, and Ally Financial Inc, Credit Suisse Group AG , HSBC Holdings Plc , Royal Bank of Scotland Group Plc , UBS AG in one.