Home owners file class action suit versus banks over Libor: FT
LONDON (Reuters) - Home owners have filed a class action suit in New York against 12 of the world's major banks, claiming that Libor manipulation made mortgage repayments more expensive than they should have been, the Financial Times reported on Monday.
It is the first class-action lawsuit filed by home owners, according to the newspaper, which said other class action suits have been brought by investors and municipalities.
The five lead plaintiffs include Annie Bell Adams, a pensioner who had her home repossessed and whose subprime mortgage was securitized into Libor-based collateralized debt obligations and sold by banks to investors, the FT said.
The suit alleges that traders at banks in Europe and North America, including Barclays (BARC.L: Quote), Bank of America (BAC.N: Quote) and UBS UBSN.VX, were incentivized to manipulate the London interbank offered rate to a higher rate on certain dates on which adjustable mortgage interest rates were reset.
This resulted in homeowners paying more between 2000 and 2009, the FT quoted the complaint as saying.
The plaintiffs, who have lost thousands of dollars each, could number 100,000, their Alabama-based attorney John Sharbrough was quoted by the FT as saying. He declined to give a figure on the total damages his clients are seeking.
Faith in the Libor interest rate system, which underpins more than $300 trillion of contracts and loans from U.S. mortgages to Japanese interest-rate swaps, plummeted after Barclays was fined in June for rigging it. Other banks are under investigation.
(Reporting by Stephen Mangan; Editing by Edwina Gibbs)
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