A federal regulator on Wednesday filed a lawsuit against UBS, asserting that the investment bank made false statements when selling $4.5 billion in MBS to Fannie Mae and Freddie Mac.

The Federal Housing Finance Agency filed the lawsuit in District Court for the Southern District of New York. It alleges that UBS made false statements about lending standards in loan packages sold to Fannie and Freddie. Those statements included "representations that signifciantly overstated the borrowers' capacity to repay their mortgage loans," the lawsuit says.

Subscribe Now

Access to a full range of industry content, analysis and expert commentary.

30-Day Free Trial

No credit card required. Access coverage of the securitization marketplace, including breaking news updated throughout the day.