UBS sued over $900 million Fannie/Freddie loss

UBS AG was sued by the conservator for Fannie Mae and Freddie Mac, which accused the Swiss bank of misleading the housing agencies into buying risky mortgage debt, resulting in more than $900 million of losses. The lawsuit by the Federal Housing Finance Agency is the latest effort by Washington to prop up the government-sponsored enterprises (GSEs), whose September 2008 federal seizure has so far cost taxpayers more than $135 billion.
UBS spokesman Peter McKillop had no immediate comment. Other banks including Bank of America Corp and its Countrywide unit have faced lawsuits by investors who claim to have lost money in mortgage-backed debt. According to the FHFA complaint filed in Manhattan federal court on Wednesday, Fannie Mae and Freddie Mac lost more than 20 percent of their more than $4.5 billion investment in residential mortgage-backed securities sold by UBS in 16 securitizations between September 2005 and August 2007.