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ResCap Affiliate Sues UBS, SunTrust Over Mortgages

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An affiliate of Ally Financial Inc.’s defunct mortgage company, Residential Capital LLC, sued UBS AG and two other lenders seeking to force them to buy back allegedly defective loans pooled into mortgages bonds.

Residential Funding Co. filed a complaint in New York State Supreme Court in Manhattan against UBS Real Estate Securities Inc., a unit of Zurich-based UBS, Switzerland’s biggest bank. The ResCap affiliate also sued SunTrust Banks Inc.’s SunTrust Mortgage unit and GreenPoint Mortgage Funding Inc., an affiliate of Capital One Financial Corp., in federal court in Manhattan.