HSBC Made False Statements In $13M MBS Deal: Insurer

Law360, New York (May 23, 2011, 3:56 PM EDT) -- Massachusetts Mutual Life Insurance Co. slapped HSBC Bank USA with a lawsuit in Massachusetts on Friday over allegedly untrue statements and omissions in the sale of $13 million in residential mortgage-backed securities now valued at less than $5 million.

In marketing the certificates, HSBC represented that the underlying loans, which were purchased from third-party lending companies, were underwritten based on prudent standards covering whether the borrowers could repay them and other characteristics, MassMutual says in the complaint.

However, the loans “deviated substantially” from those claims, according...
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