U.S. Bancorp has reportedly filed a lawsuit against Capital One Financial Corp.'s GreenPoint Mortgage Funding Inc. claiming about $400 million in losses on mortgage-backed securities (MBS).
In its complaint filed in a Manhattan federal court, U.S. Bancorp alleges that GreenPoint mortgage loans sold to Lehman Brothers Holdings Inc. and bundled into securities were riskier than GreenPoint represented.
‘This action arises out of GreenPoint's failure to stand by its guarantees despite the defects found in the loans that it originated and then sold for hundreds of millions of dollars,’ U.S. Bancorp said in its complaint, as per a report on TimesDispatch.com.
U.S. Bancorp wants Capital One to repurchase the loans. Capital One shuttered GreenPoint in August 2007, less than a year after acquiring its parent company, North Fork Bancorp.
In a related action, CIFG Assurance North America Inc. has agreed to settle lawsuits against GreenPoint and Goldman Sachs Group Inc. over MBS.