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.

The suit involves mortgage securities sold to Fannie and Freddie from fall 2005 through summer 2007.

A UBS spokesman couldn't immediately be reached for comment.

Fannie and Freddie have been under government control since September 2008, a rescue that has cost taxpayers $138 billion to date.

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