RBS, HSBC and Barclays ignored warnings from third party advisers before selling on billions of dollars of toxic mortgage debt to Fannie Mae and Freddie Mac in the lead-up to the financial crisis, court papers have alleged.
The Telegraph reports RBS is facing action over $30.4bn of sales, HSBC over $6.2bn and Barclays in relation to $4.9bn. Documents released by the US Federal Housing Finance Agency (FHFA) claim Royal Bank of Scotland (RBS) and HSBC retained the services of Clayton Holdings, a risk analysis specialist, to scrutinise loans before they were placed in bundles of mortgage-backed securities. According to the filings, reports from Clayton show 18% of the mortgage loans RBS submitted to Clayton between the first quarter of 2006 and the second quarter of 2007 were rejected. However, 53% of them ...
To continue reading this article...
Join Professional Adviser for free
Signup and gain exclusive members-only insights
- Unlimited access to real-time news, industry insights and market intelligence
- Stay ahead of the curve with spotlights on emerging trends and technologies
- Receive breaking news stories straight to your inbox in the daily newsletters
- Make smart business decisions with the latest developments in regulation, investing retirement and protection
- Members-only access to the editor’s weekly Friday commentary
- Be the first to hear about our events and awards programmes
