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F.H.A. does not adequately monitor the risks in the loans it backs, the study said.
Some industries with an indirect interest in the loans also weighed in.
In its rebuttal, the agency said its auditors had found nothing improper in the loans described in the audit.
By holding less than a 50percentt interest in the loans, Block complies with the anti-collusion rules.
And that, he said, could result in the loans from unit owners remaining on the books of the condo forever.
The suit said the Graysons and their firm "continued to sell clients participation interests in the loans at full value".
About 10percentt of those employees have indicated interest in the loans, according to a person briefed on the matter.
Their acquisition of players — and the $150,000 per week salaries paid to those players — would be unsustainable if the banks called in the loans.
The risk of banks calling in the loans and so causing a wave of defaults is very low.But does China face a debt headache?
The returns on these loans are 8 to 12 percent, and if the companies were to default, provisions in the loans would allow the fund to take over.
According to the complaint, the bank dismissed flaws in the loans packaged into securities even while assuring investors that the quality was sound.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com