Add the Federal Home Loan Bank of Chicago to the list of parties seeking billions from the banks that sold mortgage-backed securities. On Friday, the Home Loan Bank’s lawyers at Keller Rohrback filed a Cook County, Ill., state court complaint against dozens of financial institutions, including the largest banks in the world, over the sale of $3.3 billion in private label mortgage-backed securities, a type of residential mortgage-backed security that’s issued by private entities.
The suit follows similar cases filed by the Federal Home Loan Bank of Seattle in December and the Federal Home Loan Bank of San Francisco in March. Like those complaints, Chicago’s case was filed in state court and does not allege fraud. (The Seattle and San Francisco cases have since been removed to federal court.) The Chicago complaint alleges that the offering documents for the mortgage pools underlying the private-label securities were inaccurate and contained critical omissions.
