Germany's HSH Nordbank AG has filed lawsuits against two units of Barclays PLC, claiming that Barclays intentionally misrepresented the quality of loans underlying the sale of $46 million in residential mortgage-backed securities (RMBS).
The Wall Street Journal reports that the lawsuits are the latest legal challenge by HSH against Barclays. In February, HSH filed a separate summons against Barclays that stated it was planning to sue over another $122.7 million RMBS offering.
‘For each of the securitizations, the offering documents materially overstated the percentage of loans that were owner-occupied, and thus materially understated the certificates' degree of risk,’ said HSH in its new lawsuit.
HSH also claims that Barclays did not assign all of the mortgages to trusts backing the RMBS.
‘Indeed, without such assignment of the mortgages into the trusts, these so-called 'mortgage-backed securities' were not actually backed by mortgages,’ HSH continued. ‘Plaintiffs would not have purchased these certificates had they known they were not backed by collateral or the notes.’