Mortgage firms Fannie Mae and Freddie Mac have sued UBS to recover over $900 million of losses, The Wall Street Journal reports. The Swiss bank has been accused of selling unstable mortgage-backed securities worth $4.5 billion, out of which over 20% has been lost.
Regulatory agency Federal Housing Finance Agency has filed the lawsuit to recover money for the two government-controlled firms. From 2005-07, UBS allegedly made false statements about lending standards of the securities, as well as overstatements of borrowers’ capacity to pay back loans.
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