The Federal Home Loan Bank of Atlanta has settled the final claims in a complex suit alleging financial institutions defrauded it of hundreds of millions of dollars in the years leading up to the Great Recession.
The FHLB, which helps member banks provide low-interest loans to make housing affordable, claimed it invested more than $6 billion in private-label mortgage-backed securities, believing that they had been vetted by underwriters to ensure that borrowers were creditworthy and had sufficient collateral. Instead, FHLB claimed, its officials discovered they bought the securities on the basis of “false and misleading” information provided by, among others, defendants UBS Securities, J.P. Morgan Securities and Countrywide Financial Corp. (now part of Bank of America.)
