Bank of America Corp., the second-biggest U.S. lender by assets, was sued by a clearinghouse for cooperative banks in Germany over $546 million in residential mortgage-backed securities.
DZ Bank, based in Frankfurt, filed the suit today in New York State Supreme Court in Manhattan. It has taken similar actions this year in the same court against other banks, including Morgan Stanley, JPMorgan Chase & Co., HSBC Holdings Plc, UBS AG and Goldman Sachs Group Inc.
DZ Bank is one of two clearing organizations for Germany’s cooperative banks, allowing it to provide structured products directly to more than 900 local lenders. It accused Charlotte, North Carolina-based Bank of America of making “material misrepresentations and omissions” regarding the underwriting standards used to issue the loans, according to a court filing.
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.
Lawrence Grayson, a spokesman for Bank of America, declined to comment on the lawsuit in an e-mail.
The case is Deutsche Zentral-Genossenschaftsbank AG v. Bank of America Corp., 654378/2012, New York State Supreme Court, New York County (Manhattan).