Inventory
info icon
Single family homes on the market. Updated weekly.Powered by Altos Research
722,032+456
30-yr Fixed Rate30-yr Fixed
info icon
30-Yr. Fixed Conforming. Updated hourly during market hours.
7.00%0.01
InvestmentsLegal

HSH Nordbank sues Goldman Sachs, Morgan Stanley over MBS

German bank HSH Nordbank filed separate lawsuits against Goldman Sachs (GS) and Morgan Stanley (MS) this week, alleging the banks sold more than $634 million in mortgage-backed securities collateralized by risky home loans.

The first suit was levied against investment bank Goldman Sachs in the Supreme Court of the State of New York.

In that case, HSH Nordbank claims the investment bank and its subsidiaries packaged and sold $110.5 million in mortgage-backed securities without disclosing the true quality of the underlying loans.

The international bank is now seeking damages or rescissions to recover its losses.  

The offering materials (on the securities) also contained material misrepresentations and omissions regarding key statistical characteristics of the mortgage loans underlying the securities, including the loans’ loan-to-value ratios and combined LTV ratios, as well as the percentage of owner-occupied properties,” HSH Nordbank claimed in the Goldman Suit. 

As plaintiff, HSH Nordbank accused Goldman and various subsidiaries of fraud, fraudulent inducement, negligent misrepresentation and aiding and abetting fraud.

Furthermore, HSH filed suit against Morgan Stanley, claiming the investment bank packaged and sold $523.9 million in MBS that contained poorly performing loans mischaracterized at the time of sale.

The bank claims offering materials from Morgan Stanley did not disclose the true loan-to-value ratios and, in some cases, made misrepresentations about the percentage of owner-occupied properties.  

HSH Nordbank also claims the materials offered included misrepresentations about the securities’ credit ratings.

kpanchuk@housingwire.com

Most Popular Articles

Latest Articles

Lower mortgage rates attracting more homebuyers 

An often misguided premise I see on social media is that lower mortgage rates are doing nothing for housing demand. That’s ok — very few people are looking at the data without an agenda. However, the point of this tracker is to show you evidence that lower rates have already changed housing data. So, let’s […]

3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please