HSBC Says Damages May Reach $1.6B In FHFA Action

Law360, New York (August 5, 2013, 2:52 PM EDT) -- HSBC Holdings PLC could face up to $1.6 billion in damages in a Federal Housing Finance Agency suit alleging it sold shoddy mortgage-backed securities to Fannie Mae and Freddie Mac before the 2008 financial collapse, the bank said Monday.

The damages estimate, contained in HSBC's midyear report, relates to an FHFA suit alleging the bank misrepresented the underwriting standards for mortgage loans that were bundled into securities and sold to government-backed Fannie Mae and Freddie Mac in the run-up to the crisis.

HSBC was one of...
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