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Loan reclaim: UK banks accused of mis-selling sub-prime loans

Three of the UK's biggest banks have been accused of mis-selling sub-prime mortgage loans by a US investment firm.

Cambridge Place Investment Partners has filed a $2.4 billion (£1.6 billion) lawsuit against the US branches of HSBC, Barclays and Royal Bank of Scotland (RBS), reports the Daily Telegraph.

Along with 12 other Wall Street banks, such as Goldman Sachs and UBS, the three companies are accused of mis-leading investors about the value of the loans and failing to conduct proper due diligence.

The suit claims: "The Wall Street bank defendants fostered the environment for, permitted, and profited from the mortgage originators' rampant violations of sound lending practices.

"Driven to profit from the lucrative securitisation business, the defendants demanded enormous volumes of loans, leading to erosion in lending standards."

The lawsuit states Barclays mis-sold $141 million of securities between 2005 and 2007, with 46 per cent currently unpaid (in delinquency).

In the same period, RBS, through its Greenwich Capital division, is said to have mis-sold $260 million, with 35 per cent in delinquency.

HSBC is accused of mis-selling $64 million of securities in 2005 and 2006, with 40 per cent now in delinquency.

Posted by Jennifer Haines

Jennifer's speciality knowledge is credit card changes and balance transfers. ADNFCR-2776-ID-800001560-ADNFCR

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