Goldman Sachs & Co. and units of JPMorgan Chase & Co. and Ally Financial Inc. overstated the quality of loans underlying mortgage-backed securities they sold to the failed Guaranty Bank in Austin, Texas, according to lawsuits brought by the FDIC as its receiver, Bloomberg News reported yesterday. In three separate complaints filed in state court in Austin on Aug. 17, the Federal Deposit Insurance Corp. alleged those institutions and others sold about $5.4 billion worth of certificates to Guaranty Bank. Guaranty Bank, which had 103 branches in Texas and 59 in California, was closed by the Office of Thrift Supervision three years ago. Claiming the certificate sellers breached Texas securities law by making misleading or untrue statements about loans backing those certificates, the FDIC said in one complaint that it seeks at least $900 million in damages from Goldman Sachs, Ally Financial's Residential Funding Securities LLC and from units of Deutsche Bank AG and JPMorgan Chase.
