NEW YORK, May 5 (UPI) -- A federal judge in Manhattan said he would not dismiss a lawsuit against Swiss bank UBS filed by the federal regulator for two giant U.S. mortgage brokers.
The Federal Housing Finance Agency, which oversees the Federal Home Loan Mortgage Corp., known as Freddie Mac, and the Federal National Mortgage Association, known as Fannie Mae, has filed suit against 18 banks.
The FHFA contends the banks deceptively sold Freddie Mac and Fannie Mae $200 billion of bundled, mortgage-backed securities during the housing boom, The Wall Street Journal reported Saturday.
Federal Judge Denise Cote refused to grant the dismissal based on the UBS claim the statute of limitations had run its course.
Instead, Cote wrote in his answer to the UBS motion to dismiss that a preliminary review found securities that are "sufficiently suggestive of widespread inaccuracies" that made the value of the securities questionable.
There was reason to believe the quality of the securities were "objectively false," Cote wrote in his refusal to dismiss the case.