JPMorgan Chase & Co. and Citigroup Inc. were among the banks sued by the Federal Deposit Insurance Corp. over $388 million in securities sold to Colonial Bank, Bloomberg News reported on Saturday. The FDIC alleged that the banks misrepresented the quality of the loans underlying residential mortgage-backed securities that Colonial purchased, according to a complaint filed on Friday in federal court in Manhattan. The misrepresentations included inaccurate loan-to-value ratios based on inflated property values, according to the filing. Also, many of the properties at issue had second mortgages that were not disclosed, the FDIC said.
