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DOJ sues Barclays over faulty RMBS claims

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DOJ sues Barclays over faulty RMBS claims

The U.S. Departmentof Justice sued Barclays for allegedly deceiving investors who bought mortgage-backed securities, as the ripples caused by the financial crisis continue, according to an article in Bloomberg by David McLaughlin.

The article states that Barclays caused investors to lose billions of dollars due to more than half of the $31 billion in mortgages underlying the Barclays securities ending in default.

Back in July, Barclays Bank managed to barely escape a lawsuit that stated it allegedly misrepresented the quality of the mortgages that made up a $619 million mortgage bond. The Supreme Court of the state of New York ruled that U.S. Bank and the Federal Housing Finance Agency waited too long to file a lawsuit against Barclays.

The lawsuit was filed against Barclays and the now-shuttered EquiFirst beyond the statute of limitations.

The lawsuit stemmed from a 2007 mortgage bond backed by loans originated by EquiFirst, which Barclays acquired in 2007. According HousingWire’s reporting at the time, EquiFirst was, at the time, the country’s 12th largest non-prime wholesale mortgage originator.