According to Cook County, the bank's affiliates used sophisticated algorithms to provide black and Hispanic borrowers with sub-prime loans
they often could not afford.
While the sub-prime loans
debacle in the US did spark the financial crisis, if Europeans had been responsible in their spending and debt accumulation, they would have been able to better manage the consequences, as did countries like Germany and China.
The Federal Housing Finance Agency claims they sold pounds 25billion of sub-prime loans
to mortgage giants Fannie Mae and Freddie Mac.
These loans were non-prime or sub-prime loans
mostly of the buy here pay here type.
US sub-prime loans
effectively poisoned asset-backed bonds as struggling American borrowers defaulted on their repayments, which then triggered the crippling global credit squeeze and subsequent banking meltdown.
The vast majority of sub-prime loans
between 1998 and 2006 stemmed from refinancing rather than home purchases.
The boom in complex mortgage backed securities and an entire alphabet soup of toxic investments - as well as sub-prime loans
to those who could never afford them - were driven by a compensation culture which "ran out of control", he said.
Many of the illegal foreclosures were on properties with sub-prime loans
where the transfer of ownership was not recorded in local property records, making the foreclosure action illegal.
Lenders, awash with the Fed's cash, happily issued more sub-prime loans
61 percent, increased 18 basis points for sub-prime loans
These bonds were used in "structured finance" products, such as so-called collateralised debt obligations (CDOs) - giving investors an exposure to different types of debt, from the riskier sub-prime loans
to safer better-quality mortgage debt.
The crisis has also affected international lenders, who bought into or offered sub-prime loans
in the US and then contributed to bouts of chaos on international financial markets.