LOS ANGELES (3/15/12)--A hearing has been set for today in the lawsuit filed by the National Credit Union Administration (NCUA) against Goldman Sachs & Co., one of the banks it is suing for selling residential mortgage backed securities (RMBS) that caused losses to U.S. Central FCU and Western Corporate FCU.
The hearing will be in the U.S. District Court for the Central District of California--Western Division, Los Angeles, the same court in which NCUA has brought suit against RBS Securities and against Wes Corp officials related to losses stemming from RMBS.
That court has tentatively ruled in favor of RBS Securities in a similar case, but NCUA in its court documents said its allegations in the Goldman case are stronger than those upheld in other RMBS cases in other courts.
In the lawsuits, NCUA maintains that loan originators "systemically disregarded their stated underwriting standards and routinely made loans where no or insufficient compensating factors existed."
NCUA has sued five banks seeking to recoup $2 billion lost by the corporates when they were sold the RMBS. In addition to the Goldman Sachs case, NCUA has filed two suits against RBS Securities, one against J.P. Morgan Chase, and one against Wells Fargo Securities LLC (formerly Wachovia Capital Markets LLC).
The agency, which is acting as liquidating agent for the failed corporates, also has settled three other other lawsuits. HSBC, which sold RMBS to five failed corporates, agreed to pay $5.25 million without admitting fault (News Now March 13). Last year the agency collected a combined $165.5 million after it settled its suits against Citigroup and Deutsche Bank, with neither bank admitting fault (News Now Feb. 14).