FDIC Sued Over Subprime Loans

Washington Post (07/22/08) P. D2
Beal Bank has filed suit against the Federal Deposit Insurance Corp. (FDIC), accusing the regulator of violating guidelines when it assumed control of Superior Bank's subprime mortgage business in 2001. In litigation filed by Beal in 2002, the company claims "defective" loans accounted for approximately 25 percent of the 5,315 subprime mortgages that it purchased from the FDIC. A document filed in court by Beal states, "The loans sold to Beal, including the loans originated by the FDIC itself, violated Old Superior and New Superior's underwriting guidelines and almost every consumer protection and fair lending law, regulation and standard."