U.S. Regulator Sues Bank Of America, Others Over Losses On Subprime Bonds

[cal04]

Source: Reuters

A U.S. regulator sued a number of major banks Friday over losses on more than $41 billion in subprime mortgage bonds, which may hamper a broader government mortgage settlement with banks.

The lawsuits by the Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, came as a surprise to the market and weighed on bank shares. The lawsuits could add billions of dollars to the banks' potential costs at perhaps the worst possible time for the industry.

The FHFA accused major banks, including Bank of America Corp, its Merrill Lynch unit, Barclays Plc, Citigroup Inc and Nomura Holdings Inc of selling bonds backed by mortgages that should have never been packaged into securities.

The biggest banks are already negotiating with the attorneys general of all 50 states to address mortgage abuses. They are looking for a comprehensive settlement that will protect them from future litigation and limit their potential mortgage litigation losses.

http://www.reuters.com/article/2011/09/02/us-usa-fhfa-suit-idUSTRE7815VI20110902

Read more: http://www.huffingtonpost.com/2011/09/02/federal-housing-agency-sues-banks-fannie-freddie-losses_n_947133.html

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U.S. sues big banks over mortgage losses
http://www.marketwatch.com/story/us-sues-big-banks-over-mortgage-losses-2011-09-02?dist=afterbell

[DJ13]

1. I hope the admin understands that people want criminal convictions

Lawsuits just look like a slap on the wrist.

[sce56]

4. But you forgot BANK$TERS are above the law along with the rest of the Politicians Main er Wall St.

Buddies er Financial bakers. Maybe we should call those backers of the Politicians their Stock Holders!

[cstanleytech]

8. What this admin wants doesnt matter if this takes as long as i suspect it will to make its way

through the court system.

[Skink]

2. If Obama moves quickly to cap the loses for the banks he won't have to worry about fundraising.

[dipsydoodle]

3. Their losses

need to match their original scam profits.

[DJ13]

5. need to match their original scam profits.

Including all those billions in bonuses they gave themselves for being so "creative".

[dipsydoodle]

7. They were paid out of those profits.

That's exactly what I meant.

What should've been done as soon as the scam became apparent was to unwind the whole lot.

[Frisbee]

6. Not to worry...

they have a friend in the White House.

[mwrguy]

9. When do they sue S&P and Moody's for rating that shit AAA?

S&P should be dismantled.

[FarCenter]

10. Mortgages will be very hard to get in the future

Securitization of mortgages for private placement with foreign banks, insurance companies, private investors, hedge funds, pension funds, etc. had already dried up.

The securitized mortgages were only being placed with Fannie and Freddie.

This will stop and banks will only provide mortgages that they will keep on their own books and they will do this only for their best customers.

Bank of America is rumored to be laying off 30,000, probably related to largely exiting the securitized mortgage business.