Lawsuit Could Involve Thousands of Homeowners
The homeowners' lawsuit alleges that the banks that set the six-month, U.S.-dollar version of Libor consistently pushed it upward on the first business day of each month between 2000 and 2009. Those are the days on which adjustable-rate mortgages "reset," generating a new value for the variable rate borrowers pay based on the current Libor value.
With Libor rates pushed higher on these dates, the suit says, homeowners ended up paying more than they should have.
A review of 6-month U.S. dollar Libor rates from 2000 and 2001 "exposes an otherwise inexplicable increase in the rate on, or about, the first business day of each month," the suit says, adding that similar variations occurred up to February of 2009.
The banks in question either declined to comment or did not respond to requests for comment on the complaint, which was reported earlier by The Financial Times.
Thousands of Americans could potentially be part of the class action, the suit says. Between 2005 and 2009 alone, national banks originated some 900,000 adjustable-rate mortgages indexed to Libor, according to the Office of the Comptroller of the Currency.
The suit does not specify the damages it seeks, but says the defendant banks "earned hundreds of millions, if not billions, of dollars in wrongful profits" by defrauding homeowners. John Sharbrough, a lawyer for the plaintiffs, said the average borrower with a Libor-based mortgage paid about $300 extra per year as a result of the alleged conspiracy.
http://realestate.aol.com/blog/2012/10/16/banks-accused-of-defrauding-homeowners-by-rigging-libor/[
= new reply since forum marked as read
