Barclays, BofA Sued by FHFA Over Mortgage-Backed Securities

Bank of America Corp. (BAC), Citigroup Inc. (C), JPMorgan Chase & Co. (JPM) and Barclays Plc (BARC) were sued by the Federal Housing Finance Agency over residential mortgage-backed securities.

In lawsuits filed today in Manhattan federal court, the agency, representing Fannie Mae and Freddie Mac, also named as defendants Nomura Holdings Ltd., HSBC Holdings Plc (HSBA) and Credit Suisse Group AG. (CSGN)

The FHFA has been demanding refunds from banks for loans sold to Fannie Mae and Freddie Mac that were based on false or missing information about borrowers and properties. The two government-backed mortgage finance firms had to be rescued by taxpayers as defaults on home loans soared toward record levels.

The agency said in today’s filings that Fannie Mae and Freddie Mac bought $6 billion in securities from Bank of America; $24.8 billion from Merrill Lynch & Co., which Bank of America bought; and $3.5 billion from Citigroup.

The FHFA sued UBS AG, Switzerland’s biggest bank, in July over $4.5 billion in residential mortgage-backed securities sold to Fannie Mae and Freddie Mac, claiming it misstated the risks of the investments. The suit seeks unspecified damages.

Fannie Mae and Freddie Mac have operated under U.S. conservatorship since 2008, when they were seized amid subprime mortgage losses that pushed them toward insolvency.

Danielle Romero-Apsilos, a spokeswoman for New York-based Citigroup, declined to comment on today’s filing. Kerrie Cohen, a spokeswoman for Barclays, and Kristin Lemkau, a spokeswoman for JPMorgan, declined to comment.

To contact the reporter on this story: Bob Van Voris in New York at

To contact the editor responsible for this story: Michael Hytha at Z US <Equity> BAC US <Equity> BARC LN <Equity> FMCC US <Equity> FNMA US <Equity> HSBA LN <Equity> C US <Equity> JPM US <Equity> CN 8604 JT <Equity>

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