Corporate Advisory

US sues Barclays over mortgage-backed loans

Federal prosecutors have sued Barclays and two of its executives over allegedly fraudulent mortgage-backed securities the bank issued as the US housing bubble was at its peak.

 The suit claims the bank “securitised billions of dollars of loans it knew had material defects” and financed lenders that it knew were issuing mortgages to customers who would be unable to repay them, prosecutors charged. The loans in question defaulted “at exceptionally high rates early in the life of the deals”.

It comes after the breakdown of talks aimed at reaching a negotiated settlement with the US Department of Justice and seeks unspecified civil penalties from the bank and the two men.

See full article here