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The ""Federal Deposit Insurance Corp."":http://www.fdic.gov/ (FDIC) is going after a list of financial institutions over mortgage securities sold to the now defunct Colonial Bank.
[IMAGE]The complaint alleges the defendants - which include JPMorgan Chase, CitiMortgage, and Wells Fargo - made untrue statements or omitted important information when selling securities to Colonial.
[COLUMN_BREAK]The suit is over $388 million in securities Colonial purchased from the defendants.
According to the complaint, ""the defendants made untrue statements or omitted important information about such material facts as the loan-to-value ratios of the mortgage loans, the extent to which appraisals of the properties that secured the loans were performed in compliance with professional appraisal standards, the number of borrowers who did not live in the houses that secured their loans (that is, the number of properties that were not primary residences), and the extent to which the entities that made the loans disregarded their own standards in doing so.""
The FDIC was appointed as the Montgomery, Alabama-based bank's receiver when Colonial was closed by state regulators in August 2009. The bank failed with $25 billion in assets and $20 billion in deposits.
A number of other institutions were named in the suit as defendants, including Ally Financial, Credit Suisse, First Horizon, Merrill Lynch, Deutsche Bank, FTN Financial, HSBC, and UBS.
