Homeowners start class-action suit over Libor

A group of Alabama homeowners have filed a lawsuit against Bank of America and other large global banks, seeking to represent anyone who took out an adjustable-rate mortgage tied to the Libor interest rate that could have been harmed by the alleged rate-rigging scandal.

The suit was filed in federal court in the Southern District of New York and is seeking class-action status.

The homeowners, who live in the Mobile area, each had a mortgage indexed to the Libor rate that would reset monthly. The lawsuit states that because a number of banks conspired to keep the Libor rate artificially high, they were forced to pay more than they should have.

The defendant banks are members of the panel that helped set the Libor rate by submitting their interbank borrowing rates. Barclays settled charges in June that its employees manipulated the rate for $453 million.

Bank of America and a number of the others have disclosed in regulatory filings that they have received subpoenas and other requests from regulators investigating their potential participation in Libor manipulation.