Ally Sued by DZ Bank Over $289.8 Million in Mortgage-Backed Securities
By Don Jeffrey and David McLaughlin – Dec 14, 2011 10:08 PM GMT+0000
Ally Financial Inc. and Bank of America Corp. (BAC) were sued by DZ Bank AG over the sale of $289.8 million of residential mortgage-backed securities.
The defendants were “actively involved” in all aspects of the securitization of the products, acting as underwriters, broker-dealers and guarantors, DZ, the central bank for German cooperative banks, said in a complaint filed yesterday in New York State Supreme Court.
The offering for the sale misrepresented the underwriting standards used in issuing the mortgages that were pooled to make the securities, Frankfurt-based DZ said. Other defendants include RBS Securities Inc. and Financial Guaranty Insurance Co.
“The offering materials also contained material misrepresentations and omissions regarding key statistical characteristics of the mortgage loans,” DZ said.
These included loan-to-value ratios and the percentage of owner-occupied properties, DZ said.
“Specific claims are not clearly outlined in the preliminary filing by this investor,” Gina Proia, a spokeswoman for Detroit-based Ally, said in an e-mail. “The company stands by the disclosures and rejects the factual assertions in the filing.”
Bank of America declined to comment, Lawrence Grayson, a spokesman for the Charlotte, North Carolina-based company, said in an e-mail.
The case is Deutsche Zentral-Genossenschaftsbank v. Ally Financial, 653449-2011, Supreme Court of the State of New York, County of New York (Manhattan).