Goldman Sachs Sued Over Mortgage Securities by Credit Unions

Quote: Goldman Sachs Group Inc. (GS)credit unions. statementLos Angeles, is the fourth case aimed at recovering almost $2 billion from “sellers and underwriters of questionable securities,” the NCUA said. The agency said it expects to file five to 10 such cases. “NCUA continues to carry out our responsibility to do everything reasonable in our power to seek maximum recoveries,” NCUA Chairman Debbie Matz said in the statement. “Those who caused the problems in the wholesale credit unions should pay for the losses now being paid by retail credit unions.” Stephen Cohen, a spokesman for New York-based Goldman Sachs, declined to comment on the lawsuit. Royal Bank of Scotland Group Plc (RBS) in the same court. It claims in the complaint that Goldman Sachs misrepresented securities in offering documents, causing the credit unions to believe the risk of loss was minimal when it was substantial. Goldman Sachs “systematically abandoned the stated underwriting guidelines described in the offering documents” for the mortgages in the pools of collateralized residential mortgage-backed securities that it underwrote, the NCUA said in its complaint. ‘Delinquent or Default’ “Indeed, a material percentage of the borrowers whose mortgages comprised the residential mortgage-backed securities were all but certain to become delinquent or default shortly after origination,” according to the complaint. The NCUA charters and regulates federal credit unions and insures their accounts, as well as those of many state-chartered credit unions in the U.S., according to the agency’s website. Yesterday’s complaint relates to the collapse of the U.S. Central and Western Corporate federal credit unions, two of the five liquidated under NCUA conservatorship, the regulator said in its statement. JPMorgan Chase & Co. (JPM)Kansas City. Goldman Sachs rose $5.07, or 4.3 percent, to $122.73 in New Y...
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