Bank of America Sued by HSH Nordbank Over Mortgage Bonds
Bank of America Corp., the second- biggest U.S. lender by assets, was sued by German regional lender HSH Nordbank AG over more than $218 million in residential mortgage-backed securities.
The Hamburg-based bank sued Bank of America in New York State Supreme Court in Manhattan on Dec. 14, accusing the company and its Countrywide unit of making “misrepresentations and omissions” about the underwriting standards for mortgage loans that were pooled together into the securities.
Lawrence Grayson, a spokesman for Charlotte, North Carolina-based Bank of America, declined to comment on the lawsuit in an e-mail.
HSH Nordbank is one of a group of regional German lenders that have sued over mortgage-backed securities in New York during the past year. HSH Nordbank filed a similar suit against Goldman Sachs Group Inc. and Morgan Stanley in August.
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.
The case is HSH Nordbank AG v. Bank of America Corp. (BAC), 654382/2012, New York State Supreme Court, New York County (Manhattan).
To contact the reporter on this story: Chris Dolmetsch in New York at firstname.lastname@example.org
To contact the editor responsible for this story: Michael Hytha at email@example.com