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Report: Spain to probe Caja Madrid over allegations of mortgage overvaluation

Spain's High Court said March 30 that it will launch a probeinto four former executives of CajaMadrid over allegations that the bank "systematically"overvalued mortgages between 2002 and 2007, leaving the bank with a high-riskportfolio holding one of the biggest default rates in the country, Reutersreported the same day.

The court said it will also study accusations that the bankgave 20-year mortgages to foreigners who held only temporary residency permits inSpain.

The investigation was triggered by a case filed byshareholders of the bank.

Judge José de la Mata said the probe would focus on formerChairman Miguel Blesa, former financial director Ildefonso Sanchez, former riskmanagement head Ramon Martinez and Ignacio de Navasques, former head of unitTasaciones Madrid, the newswire noted.

A spokesman for the Spanish court clarified that no criminalcharges have been filed against the former Caja Madrid executives. The court,however, needs to assess the evidence to determine whether the case needs to goto trial.

Blesa, Sanchez and Martinez are involved in a separateinvestigation into the allegedmisuse of credit cards of ex-Caja Madrid executives and directors, Reuterssaid.

Caja Madrid was mergedwith six other savings banks to create BankiaSA in 2010.