Pimco, others sue Citigroup over billions in mortgage debt losses

[think]

Pimco, others sue Citigroup over billions in mortgage debt losses

Reuters - 2 hours ago

Pacific Investment Management Co and other investors have sued Citigroup over the bank's alleged failure to properly monitor toxic securities backed by more than $13.8 billion of mortgage loans, resulting in $2.3 billion of losses.

According to a complaint filed Tuesday night in a New York state court in Manhattan, Citigroup breached its duties as trustee for the 25 private-label trusts dating from 2004 to 2007 by ignoring "pervasive and systemic deficiencies" in how the underlying loans were underwritten or being serviced.

The investors said Citigroup looked askance at the loans' "abysmal performance" out of fear it might "jeopardize its close business relationships" with loan servicers including Wells Fargo and JPMorgan Chase, or prompt them to retaliate over its own problem loans.

Some loans backing the 25 trusts came from issuers including the now-defunct American Home Mortgage and Washington Mutual. The lawsuit seeks class-action status and unspecified damages.

Source:
http://www.cnbc.com/2015/11/25/pimco-others-sue-citigroup-over-billions-in-mortgage-debt-losses.html

[dixiegrrrrl]

1. Hot damn!!! Been waiting for more of these suits.

Really surprised there have not been hundreds of them already.
Those mortgage bonds were indeed based on fraudulent mortgages, worthless morgages, and sold to thousands of funds, even the big pension funds.

Happy to rec.