SAN FRANCISCO — Two East Coast savings and loans have filed a $222-million suit against Wells Fargo Bank for losses suffered in the purchase of mortgage-backed securities.
Riverhead Savings Bank of Long Island, N.Y., and First Federal Savings & Loan of Hammonton, N.J., filed suit Friday in U.S. District Court in San Francisco.
The banks, each of which seeks $111 million in damages, contend that San Francisco-based Wells Fargo is liable for losses because it did not disclose the contents of a letter that warned about problems in use of the properties as collateral for the certificates.
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Earlier lawsuits charge that the mortgages were based on false loans and on property whose value had been inflated by a group of individuals and companies working to defraud investors.