HSH Nordbank Sues Barclays Over Mortgage Backed Securities
HSH Nordbank AG (BARC), a regional German lender that was bailed out during the financial crisis, sued Barclays Bank Plc in New York over the purchase of $122.7 million in residential mortgage-backed securities.
Barclays made “misrepresentations and omissions” in offering materials about characteristics of the mortgage loans underlying the securities, including the percentage of properties occupied by the owners, Hamburg-based HSH Nordbank said in a complaint filed today in New York State Supreme Court in Manhattan.
Barclays “knew, or at a minimum was negligent in not knowing, that its representations and omissions were false and/or misleading at the time they were made,” according to the complaint.
Pools of home loans securitized into bonds were a central part of the housing bubble that helped send the U.S. into the biggest recession since the 1930s. The housing market collapsed, and the crisis swept up lenders and investment banks as the market for the securities evaporated.
A phone call to the press office at Barclays headquarters in London after normal business hours seeking comment on the lawsuit wasn’t answered.
The case is HSH Nordbank AG v. Barclays Bank Plc, 650508/2012, New York State Supreme Court (Manhattan).
To contact the reporter on this story: Chris Dolmetsch in New York at cdolmetsch@bloomberg.net
To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net
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