German Bank Sues Ally, Bank Of America

German Bank Sues Ally, Bank Of America DZ Bank AG, the central bank for Germany's cooperative banks, has sued Ally Financial Inc. and Bank of America Corp. over the sale of $289.8 million of residential mortgage-backed securities.

Bloomberg reports that DZ Bank accuses Ally and Bank of America misrepresented the underwriting standards in the mortgages that backed the securities. Financial Guaranty Insurance Co. and RBS Securities Inc. were also named as defendants in the case.

‘The offering materials also contained material misrepresentations and omissions regarding key statistical characteristics of the mortgage loans,’ DZ said in its lawsuit, which was filed in New York State Supreme Court.

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