Lawsuit Claims Securities Act Breach

Posted by Orb Staff on August 12, 2010 No Comments
Categories : Residential Mortgage

Seattle law firm Hagens Berman Sobol Shapiro LLP says a class action has been commenced in the U.S. District Court for the Northern District of California on behalf of purchasers of bonds issued by the Wells Fargo Mortgage Backed Securities 2006-AR15 Trust.

The complaint charges the trust, Wells Fargo Bank, Deutsche Bank and others with violations of the Securities Act of 1933. The complaint alleges that the trust's registration statement, prospectus and prospectus supplement contained materially false and misleading statements regarding the underwriting standards and loan origination processes used in procuring the loans used to secure the bonds.

Specifically, the complaint alleges that the documents warranted that the mortgages were made in conformity with applicable laws, and that the mortgages underlying the bonds issued by the trust were underwritten pursuant to specific guidelines established by Wells Fargo Bank, but that these standards were disregarded in the actual mortgage loan underwriting process.

The complaint further alleges that Deutsche Ban failed to perform an adequate due-diligence investigation prior to underwriting these bonds, Hagens Berman says.

SOURCE: Hagens Berman Sobol Shapiro

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